The Dynamics of Market Entry: The Effects of Mergers and Acquisitions on Entry in the Banking Industry

45 Pages Posted: 8 Dec 1999

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

Seth D. Bonime

PepsiCo; Yale School of Management

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: September 2000

Abstract

We study the dynamics of market entry following mergers and acquisitions (M&As) using banking industry data. The findings suggest that M&As are associated with significant subsequent increases in the probability of entry and may explain more than 20% of entry in metropolitan markets, and more than 10% of entry in rural markets. These findings also suggest that entry may be part of an ?external? effect of M&As that helps supply credit to some relationship-dependent small business borrowers. Our results are robust to use of alternative econometric methods, changes in specifications of the exogenous variables, and alteration of the data samples.

Note: Previous title: The Dynamics of Market Entry: The Effects of Mergers and Acquisitions on De Novo Entry and Small Business Lending in the Banking Industry

Keywords: Entry, Bank, Mergers

JEL Classification: G21, G28, G34, E58, L89

Suggested Citation

Berger, Allen N. and Bonime, Seth D. and Goldberg, Lawrence G. and White, Lawrence J., The Dynamics of Market Entry: The Effects of Mergers and Acquisitions on Entry in the Banking Industry (September 2000). AFA 2001 New Orleans; FEDS Working Paper No. 99-41. Available at SSRN: https://ssrn.com/abstract=186009 or http://dx.doi.org/10.2139/ssrn.186009

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

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

Register to save articles to
your library

Register

Paper statistics

Downloads
1,653
Abstract Views
6,526
rank
10,063
PlumX Metrics