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The Effects of Bank Mergers and Acquisitions on Small Business Lending

Journal of Financial Economics, Vol. 50, November 1998

Posted: 12 Nov 1998  

Allen N. Berger

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

Anthony Saunders

New York University - Leonard N. Stern School of Business

Gregory F. Udell

Indiana University - Kelley School of Business - Department of Finance

Joseph M. Scalise

University of Pennsylvania, Wharton School; Bain & Company

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Abstract

This paper examines the effects of over 6,000 recent U.S. bank mergers and acquisitions (M&As) on small business lending. It is the first to decompose the impact of M&As into static effects from simply combining the institutions into a pro forma larger organization, and dynamic effects associated with post-M&A refocusing of the consolidated institution. It is also the first to estimate the external effect -- the dynamic reactions of other local banks. It is found that the static effects of M&As tend to 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.

Notes: This is a description of the article and is not the actual abstract.

Suggested Citation

Berger, Allen N. and Saunders, Anthony and Udell, Gregory F. and Scalise, Joseph M., The Effects of Bank Mergers and Acquisitions on Small Business Lending. Journal of Financial Economics, Vol. 50, November 1998. Available at SSRN: https://ssrn.com/abstract=137993

Allen N. Berger (Contact Author)

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

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
United States

European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Anthony Saunders

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

44 West 4th Street
9-190, MEC
New York, NY 10012-1126
United States
212-998-0711 (Phone)
212-995-4220 (Fax)

Gregory F. Udell

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

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

Joseph M. Scalise

Bain & Company

Two Copley Place
Boston, MA 02118

University of Pennsylvania, Wharton School ( email )

3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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