10.17889/E110176
Crawford, Gregory S.
Pavanini, Nicola
Schivardi, Fabiano
Replication data for: Asymmetric Information and Imperfect Competition in Lending Markets
ICPSR Inter-university Consortium for Political and Social Research
2017
10.1257/aer.20150487
10.1257/aer.20150487
V0
We study the effects of asymmetric information and imperfect competition in the market for small business lines of credit. We estimate a structural model of credit demand, loan use, pricing, and firm default using matched firm-bank data from Italy. We find evidence of adverse selection in the form of a positive correlation between the unobserved determinants of demand for credit and default. Our counterfactual experiments show that while increases in adverse selection increase prices and defaults on average, reducing credit supply, banks' market power can mitigate these negative effects.