Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Thompson casts doubt on the rehabilitative intentions of prison labor

Inglehart says European social democracy is a victim of its own success

Bound, Khanna, and Morales find multiple effects of H1-B visas on US tech industry

More News

Highlights

Heather Ann Thompson wins Bancroft Prize for History for 'Blood in the Water'

Michigan ranks in USN&WR top-10 grad schools for sociology, public health, labor economics, social policy, social psychology

Paula Lantz to speak at Women in Health Leadership Summit, March 24, 2:30-5:30 Michigan League

New site highlights research, data, and publications of Relationship Dynamics and Social Life study

More Highlights

Next Brown Bag

Mon, March 20, 2017, noon:
Dean Yang, Taken by Storm

Competition Under Credit Rationing: Theory and Evidence From Rural China

Publication Abstract

Park, Albert F., L. Brandt, and J. Giles. 2003. "Competition Under Credit Rationing: Theory and Evidence From Rural China." Journal of Development Economics, 71(2): 463-495.

We present a duopoly model of financial competition to describe the conditions under which competition leads to greater bank effort when repressed financial systems ration credit. The model features an entrant that freely sets its interest rate, and an incumbent that must charge a rate below that which is market clearing. Both players may exert costly effort to inform themselves about borrower types. Using data on rural financial institutions in China, we test empirically the effects of competition on deposit growth, loan portfolio composition, repayment rates, and other effort measures, finding positive effects of competition on effort and financial performance. (C) 2003 Elsevier Science B.V. All rights reserved.

Browse | Search : All Pubs | Next