The Dymanics of Market Entry: The Effects of Mergers and Acquisitions on De Novo Entry and Small Business Lending in the Banking Industry,

52 Pages Posted: 3 Nov 2008

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business

Seth D. Bonime

PepsiCo; Yale School of Management

Lawrence G. Goldberg

University of Miami - Department of Finance

Lawrence J. White

Stern School of Business, New York University; New York University (NYU) - Leonard N. Stern School of Business, Department of Economics

Date Written: July 1999

Abstract

We study the dynamics of market entry following mergers and acquisitions (M&As), and the behavior of recent entrants in supplying output that might be withdrawn by the consolidating firms. The data, drawn from the banking industry, suggests that M&As are associated with subsequent increases in the probability of entry. The estimates suggest that M&As explain more than 20% of entry in metropolitan markets, and more than 10% ofentry in rural markets. Additional results suggest that bank age has a strong negative effect on the small business lending of small banks, but that M&As have little influence on this lending.

Keywords: Entry, Barriers to Entry, Bank, Mergers, Small Business

Suggested Citation

Berger, Allen N. and Bonime, Seth D. and Goldberg, Lawrence G. and White, Lawrence J. and White, Lawrence J., The Dymanics of Market Entry: The Effects of Mergers and Acquisitions on De Novo Entry and Small Business Lending in the Banking Industry, (July 1999). NYU Working Paper No. EC-99-13, Available at SSRN: https://ssrn.com/abstract=1293094

Allen N. Berger (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

1014 Greene St.
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Seth D. Bonime

PepsiCo

700 Anderson Hill Road
Purchase, NY 10577
United States

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Lawrence G. Goldberg

University of Miami - Department of Finance

P.O. Box 248094
Coral Gables, FL 33124-6552
United States

Lawrence J. White

New York University (NYU) - Leonard N. Stern School of Business, Department of Economics ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Stern School of Business, New York University ( email )

44 West 4th Street
New York, NY 10012
United States
212-998-0880 (Phone)
212-995-4218 (Fax)

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