Large Banks and Small Firm Lending

52 Pages Posted: 11 Nov 2015 Last revised: 21 Oct 2018

See all articles by Vitaly Bord

Vitaly Bord

Federal Reserve Board

Victoria Ivashina

Harvard University; National Bureau of Economic Research (NBER)

Ryan Taliaferro

Acadian Asset Management

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2018


We show that since 2007, there was a large and persistent shift in the composition of lenders to small firms. Large banks impacted by the collapse of real estate prices systematically contracted their credit to all small firms throughout the U.S.. However, healthy banks expanded their operations and entered new banking markets. The market share gain of these banks was a standard deviation above the long-run historical market share growth and persists for years following the financial crisis. Despite this offsetting expansion, the net effect of the contraction in credit was negative, with lower aggregate credit and deposits growth, and lower entrepreneurial activity through 2015.

Keywords: Small Firms, Credit Supply, Banking Competition.

JEL Classification: G21

Suggested Citation

Bord, Vitaly and Ivashina, Victoria and Taliaferro, Ryan, Large Banks and Small Firm Lending (October 15, 2018). Available at SSRN: or

Vitaly Bord (Contact Author)

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Victoria Ivashina

Harvard University ( email )

Harvard Business School
Baker Library 233
Boston, MA 02163
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Ryan Taliaferro

Acadian Asset Management ( email )

260 Franklin Street
Boston, MA 02110
United States

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