Bank Local Specialization

57 Pages Posted: 15 Feb 2022

See all articles by Banque de France RPS Submitter

Banque de France RPS Submitter

affiliation not provided to SSRN

Anne Duquerroy

Banque de France

Clément Mazet-Sonilhac

Banque de France; Collège de France; SciencesPo - Sciences Po - Department of Economics

Jean-Stéphane Mésonnier

Banque de France

Daniel Paravisini

London School of Economics & Political Science (LSE)

Date Written: February 2022

Abstract

Using micro-data on bank-SME relationships in France, we show that banks specialize locally by industry and that this specialization shapes the equilibrium amount of lending. We use the reallocation of firms’ accounts from closed branches to nearby branches of the same bank, as a source of quasi-random variation in the match between a firm’s industry and the industry of specialization of its bank. Reallocation is associated with a significant and persistent drop in credit, the magnitude of which doubles for firms transferred to a branch less specialized in their industry.

Keywords: Bank Specialization, SMEs, Relationship Banking, Branch Closures

JEL Classification: G21

Suggested Citation

RPS Submitter, Banque de France and Duquerroy, Anne and Mazet-Sonilhac, Clément and Mésonnier, Jean-Stéphane and Paravisini, Daniel, Bank Local Specialization (February 2022). Banque de France Working Paper No. 865, Available at SSRN: https://ssrn.com/abstract=4034634 or http://dx.doi.org/10.2139/ssrn.4034634

Banque de France RPS Submitter (Contact Author)

affiliation not provided to SSRN

Anne Duquerroy

Banque de France ( email )

Paris
France

Clément Mazet-Sonilhac

Banque de France ( email )

Paris
France

Collège de France ( email )

11 Place Marcelin Berthelot
Paris, 75231
France

SciencesPo - Sciences Po - Department of Economics ( email )

28, rue des Saints-Pères
Paris, Paris 75007
France

Jean-Stéphane Mésonnier

Banque de France ( email )

Paris
France
+33 (0)1 42 92 91 63 (Phone)

Daniel Paravisini

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom

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