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The Impact of Bank Deregulations on Farm Financial Stress and Stability

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  • Eric C. Davis

    (Department of Agricultural, Environmental, and Development Economics, The Ohio State University, Columbus, OH 43210, USA)

  • Ani L. Katchova

    (Department of Agricultural, Environmental, and Development Economics, The Ohio State University, Columbus, OH 43210, USA)

Abstract

Previous research on bank deregulation has supported the idea that interstate banking deregulation lowered the cost of credit and increased the net farm income. This analysis builds on that base by investigating whether the agricultural loan delinquency volume was also affected. Using a panel data fixed effects approach, deregulation was found to be associated with changes in the volume of delinquencies: interstate banking deregulation reduced the volume of production loan delinquencies, and de novo branching deregulation increased both production and real-estate loan delinquencies. Thus, deregulation’s outcome is not clear cut: interstate banking reduced farm financial stress but de novo deregulation increased it.

Suggested Citation

  • Eric C. Davis & Ani L. Katchova, 2020. "The Impact of Bank Deregulations on Farm Financial Stress and Stability," Sustainability, MDPI, vol. 12(4), pages 1-14, February.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:4:p:1684-:d:324509
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    References listed on IDEAS

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    Cited by:

    1. Kim, Kevin N. & Katchova, Ani, 2022. "Determinants of Community & Agricultural Bank Consolidations: A Rare Event Study," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322375, Agricultural and Applied Economics Association.

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