The Effects of Dynamic Changes in Bank Competition on the Supply of Small Business Credit

29 Pages Posted: 12 Sep 2001

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

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

Multiple version iconThere are 3 versions of this paper

Date Written: August 2001

Abstract

We study the effects of structural changes in banking markets on the supply of credit to small businesses. Specifically, we examine whether bank mergers and acquisitions (M&As) and entry have "external" effects on small business loans by other banks in the same local markets. The results suggest modest positive external effects from these dynamic changes in competition, except that large banks may reduce small business lending in reaction to entry. We confirm bank size and age as important determinants of this lending, and show that the measured age effect does not appear to be driven by local market M&A activity.

Keywords: Bank, mergers, small business

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

Suggested Citation

Berger, Allen N. and Goldberg, Lawrence G. and White, Lawrence J., The Effects of Dynamic Changes in Bank Competition on the Supply of Small Business Credit (August 2001). FEDS Discussion Paper No. 2001-35. Available at SSRN: https://ssrn.com/abstract=282513 or http://dx.doi.org/10.2139/ssrn.282513

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
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803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
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European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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

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