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; European Banking Center
New York University - Leonard N. Stern School of Business
Joseph M. Scalise
University of Pennsylvania, Wharton School; Bain & Company
Gregory F. Udell
Indiana University - Kelley School of Business - Department of Finance
NYU Working Paper No. FIN-98-007
We examine the effects of bank M&As on small business lending using data on over 6,000 recent U.S. bank M&As. We are the first to decompose the impact of M&As into static effects from simply melding the antecedent institutions, and dynamic effects associated with post-M&A refocusing of the consolidated institution. We are also the first to estimate the dynamic reactions of other local banks. We find that the static effects of consolidation reduce small business lending, but are mostly offset by the reactions of other banks, and in some cases also by refocusing efforts of the consolidating institutions themselves.
Number of Pages in PDF File: 47
Keywords: Bank, Mergers, Small Businessworking papers series
Date posted: November 7, 2008
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