The Economic Impact of Changes in the Local Bank Presence
IESEG Working Paper Series 2017-ACF-01
45 Pages Posted: 11 Jan 2017
Date Written: January 10, 2017
The study analyses the economic consequences of changes in the local bank presence. Using a unique dataset of banks, firms, and counties in Poland over the period 2009-2014, we show that changes in local banking that increase the role of the relationship banking model are associated with improvements in local labour markets and easier access of SMEs to bank debt. Moreover, radical changes in the ownership structure of large commercial banks result in a more rapid new firm creation. Finally, we document that young companies’ performance is more sensitive to the instability of local banking markets.
Keywords: Local Economic Activity, SMEs, Entrepreneurship, Local Banks
JEL Classification: G21, G32, R11
Suggested Citation: Suggested Citation