Staying, Dropping, or Switching: The Impacts of Bank Mergers on SMEs

TILEC Discussion Paper No. 2006-034

54 Pages Posted: 13 Dec 2006

See all articles by Hans Degryse

Hans Degryse

KU Leuven, Department Accounting, Finance and Insurance; Centre for Economic Policy Research (CEPR)

Nancy Masschelein

National Bank of Belgium - Department of International Cooperation and Financial Stability

Janet Mitchell

National Bank of Belgium - Department of Financial Stability; Centre for Economic Policy Research (CEPR)

Date Written: December 2006

Abstract

This paper studies the impact of bank mergers on firm-bank lending relationships using detailed loan contract data from Belgium. We argue that in order to accurately gauge the heterogeneous impacts of mergers, the analysis must distinguish borrowers not only by their relationship with the acquiring versus the target bank in a merger and by firm size, but also by whether they have single versus multiple-bank relationships. For single-relationship borrowers, it is necessary to go beyond the usual comparison of relationship continuation and discontinuation to analyze the three alternatives of staying, dropping, and switching. For multiple-relationship borrowers, relationship intensity also plays a role.

Suggested Citation

Degryse, Hans and Masschelein, Nancy and Mitchell, Janet, Staying, Dropping, or Switching: The Impacts of Bank Mergers on SMEs (December 2006). TILEC Discussion Paper No. 2006-034. Available at SSRN: https://ssrn.com/abstract=951422 or http://dx.doi.org/10.2139/ssrn.951422

Hans Degryse (Contact Author)

KU Leuven, Department Accounting, Finance and Insurance ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Nancy Masschelein

National Bank of Belgium - Department of International Cooperation and Financial Stability ( email )

Research Department
Boulevard de Berlaimont 14
B-1000 Brussels, 1000
Belgium

Janet Mitchell

National Bank of Belgium - Department of Financial Stability ( email )

14 Blvd de Berlaimont
B-1000 Brussels
Belgium
+32 2 221 3459 (Phone)
+32 2 221 3104 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
126
Abstract Views
833
rank
233,417
PlumX Metrics