Staying, dropping, or switching : the impacts of bank mergers on small firms
AbstractAssessing the impacts of bank mergers on small firms requires separating borrowers with single versus multiple banking relationships and distinguishing the three alternatives of "staying," "dropping," and "switching" of relationship. Single-relationship borrowers who "switch" to another bank following a merger will be less harmed than those whose relationship is "dropped" and not replaced. Using Belgian data, we find that single-relationship borrowers of target banks are more likely than other borrowers to be dropped. We track post-merger performance and show that many dropped target-bank borrowers are harmed by the merger. Multiple-relationship borrowers are less harmed, as they can better hedge against relationship discontinuations
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Bibliographic InfoPaper provided by National Bank of Belgium in its series Working Paper Research with number 179.
Length: 45 pages
Date of creation: Oct 2009
Date of revision:
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Bank mergers; bank lending relationships; SME loans;
Other versions of this item:
- Hans Degryse & Nancy Masschelein & Janet Mitchell, 0. "Staying, Dropping, or Switching: The Impacts of Bank Mergers on Small Firms," Review of Financial Studies, Society for Financial Studies, vol. 24(4), pages 1102-1140.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-07 (All new papers)
- NEP-BAN-2009-11-07 (Banking)
- NEP-COM-2009-11-07 (Industrial Competition)
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