Large Banks and Small Firm Lending

53 Pages Posted: 22 Oct 2018 Last revised: 26 Oct 2018

See all articles by Vitaly Bord

Vitaly Bord

Harvard University

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 2018

Abstract

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 real estate prices collapse 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.

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Suggested Citation

Bord, Vitaly and Ivashina, Victoria and Taliaferro, Ryan, Large Banks and Small Firm Lending (October 2018). NBER Working Paper No. w25184. Available at SSRN: https://ssrn.com/abstract=3270764

Vitaly Bord (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
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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