The Effects of Bank Mergers and Acquisitions on Small Business Lending
Allen N. Berger
University of South Carolina - Moore School of Business; Wharton Financial Institutions Center; Tilburg University - CentER
affiliation not provided to SSRN
Joseph M. Scalise
University of Pennsylvania, Wharton School; Bain & Company
Gregory F. Udell
Indiana University Bloomington - Department of Finance
NYU Working Paper No. FIN-97-001
We examine the effects of bank M&As on small business lending. Our methodology permits empirical analysis of the vast majority of U.S. bank M&As since the late 1970s -- over 6,000 M&As involving over 10,000 banks (some active banks are counted multiple times). We are the first to decompose the impact of M&As on small business lending into static effects associated with a simple melding of the antecedent institutions and dynamic effects associated with post-M&A refocusing of the consolidated institution. We are also the first to estimate the reactions of other banks in local markets to M&As. We find that the static effects of consolidation which reduce small business lending are mostly offset by the reactions of other banks in the amrket, and in some cases also by refocusing efforts of the consolidating institutions themselves.
Number of Pages in PDF File: 52working papers series
Date posted: November 4, 2008
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