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Competition and stability in the credit industry: Banking vs. factoring industries

Degl’Innocenti, Marta and Fiordelisi, Franco and Trinugroho, Irwan (2019) 'Competition and stability in the credit industry: Banking vs. factoring industries.' The British Accounting Review. ISSN 0890-8389

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Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking.

Item Type: Article
Uncontrolled Keywords: Banking, Factoring, Competition, Stability
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 05 Nov 2019 09:36
Last Modified: 22 Mar 2021 02:00

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