English, Article, Journal or magazine article edition: Centralization Versus Decentralization in Credit Lending M. Idriss GHODBANE

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/178602
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Centralization Versus Decentralization in Credit Lending
Author
  • M. Idriss GHODBANE
Physical Description
  • preprint
Notes
  • This paper explores different organizational forms in terms of their ability to generate information about investment projects and allocate capital to these projects efficiently. A decentralized approach-with small, single-manager firms- is most likely to be attractive when information about individual projects is Ònon-verifiableÓ and cannot be credibly transmitted. Moreover, holding fixed firm size, non-verifiable information also favors flatter organizations with fewer layers of management. In contrast, large hierarchical firms with multiple layers of management are at comparative advantage when information can be costlessly ÒverifiedÓ and passed along within the hierarchy. As a concrete application of the theory, the paper discusses the consequences of consolidation in the banking industry. It has been documented that when large banks acquire small banks, there is a pronounced decline in lending to small businesses. To the extent that small-business lending relies heavily on non-verifiable information, this is exactly what the theory would lead one to expect.
  • RePEc:ctl:louvir:2002002
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment