De Novo Banks and Lending to Small Businesses: An Empirical Analysis

30 Pages Posted: 7 Nov 2008

See all articles by Lawrence G. Goldberg

Lawrence G. Goldberg

University of Miami - Department of Finance

Lawrence J. White

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

Date Written: July 1997

Abstract

Recent widespread consolidation in the banking industry has elicited concern that lending to small businesses will be reduced by the banking industry. The consolidation, though, has stimulated an upsurge in new bank charters. This study compares the lending by de novo banks to small businesses with the lending by similarly sized incumbent banks for years 1987-1994. We find that the portfolios of de novo banks consistently contain a substantially higher percentage of small business loans than do the portfolios of similar incumbents. These results indicate that de novo banks can be part of the solution to the problems that consolidation may create.

Suggested Citation

Goldberg, Lawrence G. and White, Lawrence J., De Novo Banks and Lending to Small Businesses: An Empirical Analysis (July 1997). NYU Working Paper No. FIN-98-039. Available at SSRN: https://ssrn.com/abstract=1297107

Lawrence G. Goldberg (Contact Author)

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

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