Did the JOBS Act Benefit Community Banks? A Regression Discontinuity Study

42 Pages Posted: 15 Mar 2013 Last revised: 24 Aug 2014

Date Written: February 19, 2014


This study examines the effect of section 601(a)(2) of the Jumpstart Our Small Business (JOBS) Act of 2012, which modified the threshold for unlisted banks and bank holding companies (BHCs) to deregister under the Securities Exchange Act of 1934 from 300 to 1,200 shareholders of record. This change in the cutoff permits utilizing the quasi-experimental technique of regression discontinuity to identify the causal effect of Exchange Act deregistration on the performance of banks and BHCs that took advantage of the statutory change. Using an original dataset consisting of 187 community banks and a novel application of comparative interrupted time series analysis to regression discontinuity, I estimate the local average treatment effect of deregistration on compliers. Consistent with theory and qualitative evidence that the JOBS Act was beneficial for smaller banks, deregistration caused $1.27 higher net income and $3.38 lower pretax expenses per $1 of average assets, and $1.24 million greater assets per employee. However, deregistered banks also had $2.35 lower pretax income and $1.95 lower equity capital per $1 of assets.

Suggested Citation

Mitts, Joshua, Did the JOBS Act Benefit Community Banks? A Regression Discontinuity Study (February 19, 2014). Available at SSRN: https://ssrn.com/abstract=2233502 or http://dx.doi.org/10.2139/ssrn.2233502

Joshua Mitts (Contact Author)

Columbia Law School ( email )

435 West 116th Street
New York, NY 10025
United States

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