Resource title

Integrating with their feet: cross-border lending at the German-Austrian border

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Resource description

The financial integration in Europe concentrates on cross-border mergers rather than cross-border lending and emphasizes the need for harmonizing bank regulation and supervision. We study the impact of cross-border lending in a theoretical model where banks acquire either hard or soft information of borrowing firms. We test the model s predictions using the ifo business climate survey that reports the perceptions of German firms credit availability between 2003 and 2006. Our results show that distance matters for cross-border lending, especially for the SMEs. In contrast to the policy of harmonization, differences in bank regulations may have speeded up the cross-border lending.

Resource author

Jarko Fidrmuc, Christa Hainz

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/26324

Resource license

Adapt according to the presented license agreement and reference the original author.