Banking Market Concentration and Credit Availability to Small Businesses

This paper examines how banking market concentration affects small businesses finance. Using the Survey of Small Business Finance, the empirical model show that bank concentration may adversely affect the amount of credit supplied to small businesses. We find that bank concentration decreases the L/C limits of firms significantly, while there is no statistically significant difference in L/C balance across banking markets. We also show that bank concentration lowers the overall debt-to-asset ratio of small firms that includes loans from nonbank institutions, suggesting that credit from non-bank institutions do not fully make up the effect of bank concentration.Small Business Finance, Banking Market Concentration

The Second Paycheck to Keep Up With the Joneses: Relative Income Concerns and Labor Market Decisions of Married Women

This paper investigates whether one’s effort to keep up with the Joneses has any effect on labor supply behavior. We provide a simple model and empirical evidence that labor supply decisions of married women are influenced by relative as well as absolute income of their husbands. We find, after controlling for husbands’ absolute income and other individual characteristics, that married women are more likely to be in labor force when their husbands’ relative income is low. Results are robust across various settings and measures of relative income and the size of the effect is economically meaningful. We also show that income inequality of reference group of husbands in age-regional cross sections can be a predictor of their wives’ labor supply.Interdependent utility, relative income, social comparisons, inequality, emulation, labor market participation of married women.

Parsimonious Lenders: Bank Concentration and Credit Availability to Small Businesses

This paper examines how bank competition affects the amount of credit provided to small businesses using both the loan turndown rate and the size of granted loans and L/Cs. Using 2003 National Survey of Small Business Finance data, we show that commercial banking in concentrated banking markets are more likely to reject loan applications. Moreover, the size of granted loans is found to be significantly smaller in concentrated markets. Finally, we show that the total limit of L/Cs that a firm has is also significantly smaller for firms in concentrated banking markets. Our finding challenges a notion that credit market competition may be inimical to the formation of mutually beneficial relationships between firms and specific creditors. We do not find any evidence that bank concentration is instrumental in building relationship banking and our results suggest the opposite.Bank Competition, Credit Availability, Small Business, Relationship Banking

Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right

We investigate the importance of Veblen effects on work hours, namely the manner in which a desire to emulate the consumption standards of the rich influences individuals’ allocation of time between labor and leisure. Our model of the choice of work hours captures Veblen effects by taking account of the influence of the consumption of the well-to-do on the marginal utility of consumption by the less well-off. The main result is that work hours are increasing in the degree of income inequality. We use data on work hours of manufacturing employees in ten countries over the period 1963-1998, along with three different measures of income inequality to explore this hypothesis. Using both OLS and country-fixed-effects estimates, we find that greater inequality predicts longer work hours. Its effects are large, and estimates are robust across a variety of specifications. Additional evidence suggests that while greater inequality may induce longer hours for conventional incentive reasons, this mechanism does not account for our results. We show that in the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by more complicated (progressive) consumption taxes or by subsidizing the leisure of the rich.Interdependent utility, relative income, emulation, Veblen effects, work hours

Emulation, Inequality, and Work Hours: Was Thorsten Veblen Right?

We investigate Veblen effects on work hours, namely the way that a desire to emulate the consumption standards of the rich induces longer work hours among the rest. Consistent with our model of these asymmetric social comparisons, greater inequality predicts longer work hours in ten OECD countries over the period 1963-1998. The country fixed effects estimates of the impact of inequality on hours are large, robust, and cannot be explained by conventional incentive effects. In the presence of Veblen effects, a social welfare optimum cannot be implemented by a flat tax on consumption but may be accomplished by progressive consumption taxes.Interdependent utility, relative income, social comparisons, inequality, emulation, Veblen effects, work hours

The Second Paycheck to Keep Up With the Joneses: Relative Income Concerns and Labor Market Decisions of Married Women

This paper investigates whether one’s effort to keep up with the Joneses has any effect on labor supply behavior. We provide a simple model and empirical evidence that labor supply decisions of married women are influenced by relative as well as absolute income of their husbands. We find, after controlling for husbands’ absolute income and other individual characteristics, that married women are more likely to be in labor force when their husbands’ relative income is low. Results are robust across various settings and measures of relative income and the size of the effect is economically meaningful. We also show that income inequality of reference group of husbands in age-regional cross sections can be a predictor of their wives’ labor supply

Parsimonious Lenders: Bank Concentration and Credit Availability to Small Businesses

This paper examines how bank competition affects the amount of credit provided to small businesses using both the loan turndown rate and the size of granted loans and L/Cs. Using 2003 National Survey of Small Business Finance data, we show that commercial banking in concentrated banking markets are more likely to reject loan applications. Moreover, the size of granted loans is found to be significantly smaller in concentrated markets. Finally, we show that the total limit of L/Cs that a firm has is also significantly smaller for firms in concentrated banking markets. Our finding challenges a notion that credit market competition may be inimical to the formation of mutually beneficial relationships between firms and specific creditors. We do not find any evidence that bank concentration is instrumental in building relationship banking and our results suggest the opposite

Banking Market Concentration and Credit Availability to Small Businesses

This paper examines how banking market concentration affects small businesses finance. Using the Survey of Small Business Finance, the empirical model show that bank concentration may adversely affect the amount of credit supplied to small businesses. We find that bank concentration decreases the L/C limits of firms significantly, while there is no statistically significant difference in L/C balance across banking markets. We also show that bank concentration lowers the overall debt-to-asset ratio of small firms that includes loans from nonbank institutions, suggesting that credit from non-bank institutions do not fully make up the effect of bank concentration

An Explorative Study on Sales Distribution in M-commerce

Despite the proliferation of studies on the sales distribution in e-commerce, little research has been conducted on the sales distribution in the m-commerce channel. This study empirically examines the sales distribution of various product categories in the mobile channel, using the large transaction data from a leading e-marketplace in Korea. Overall, transactions in the mobile channel are more concentrated to head products compared to the PC channel sales, but the pattern is inconsistent across product categories. Transactions in product categories of high average price (e.g., computers) and low purchase frequency rate (e.g., health care products) are less concentrated to head products in the mobile channel than the PC channel. The revenue distribution, however, shows the opposite. Head products generate relatively less revenue in the mobile channel than the PC channel. We provide explanations why the mixing results appear across product categories and between the distribution types