2024-11-0919990020-659810.1111/1468-2354.00018http://dx.doi.org/10.1111/1468-2354.00018https://hdl.handle.net/20.500.14288/11428Commerical bank debts of developing countries are held by large international banks and smaller domestic banks. This paper investigates how debt concentration-the proportion of a country's debt held by large banks relative to small banks-affects the secondary market price for the se loans. We find that countries with higher concentrations have higher secondary-market prices. We explain this empirical finding in a bargaining model that endogenizes the maximum penalty that banks can credibly impose on a recalcitrant debtor. We show that the banks' bargaining power increases with the degree of debt concentration, thus increasing repayment and secondary-market prices.EconomicsJournal Article80273900005Q33025