38 Pages Posted: 24 Feb 2003
Date Written: December 2002
This paper analyzes the role of bank competition on the life-cycle dynamics of non-financial industries. Using multi-dimensional data sets, which contain information on job creation and destruction for establishments in U.S. manufacturing sectors operating in different geographical regions and over time, I find evidence that bank competition accelerates the expansion of start-ups and helps them to thrive while young. Once these establishments are mature, however, less competitive banking markets are more propitious. Specifically, mature establishments expand at higher rates and exit the industry at a slower pace in less competitive banking markets.
Suggested Citation: Suggested Citation
Cetorelli, Nicola, Life-Cycle Dynamics in Industrial Sectors. The Role of Banking Market Structure (December 2002). FRB of Chicago Working Paper No. 2002-26. Available at SSRN: https://ssrn.com/abstract=367201 or http://dx.doi.org/10.2139/ssrn.367201
By Ross Levine