The Effects of Bank Mergers and Acquisitions on Small Business Lending

52 Pages Posted: 4 Nov 2008

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Anthony Saunders

New York University (NYU) - 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

Multiple version iconThere are 3 versions of this paper

Date Written: March 1997

Abstract

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.

Suggested Citation

Berger, Allen N. and Saunders, Anthony and Scalise, Joseph M. and Udell, Gregory F., The Effects of Bank Mergers and Acquisitions on Small Business Lending (March 1997). NYU Working Paper No. FIN-97-001. Available at SSRN: https://ssrn.com/abstract=1295209

Allen N. Berger (Contact Author)

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

1705 College St
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Wharton Financial Institutions Center

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Anthony Saunders

New York University (NYU) - Leonard N. Stern School of Business

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Joseph M. Scalise

University of Pennsylvania, Wharton School ( email )

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Bain & Company

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Boston, MA 02118

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States

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