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

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 2279

Classification and Topics

• Classification: Wirtschaft ; General Financial Markets: Government Policy and Regulation ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
• Subject: financial integration ; SMEs ; banking supervision ; business surveys ; threshold analysis ; Klein- und Mittelunternehmen ; Fremdkapital ; Kreditgeschäft ; Internationaler Finanzmarkt ; Marktintegration ; Bankenaufsicht ; Geschäftsklima ; Deutschland ; Österreich ; EU-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Fidrmuc, Jarko ; Hainz, Christa
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2008

Further information

• Handle: http://hdl.handle.net/10419/26324
• Last update: 10.03.2025, 11:46 AM CET