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Bank market structure and entrepreneurship

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  • Tammy Rogers

Abstract

This paper investigates the impact of bank market structure differences within U.S. states on entrepreneurial activity. A panel model is used to evaluate differences in new firm starts within the states relative to the bank market structure and competition. The results indicate that states with more small banks, as measured by the number of unit banks, and banks with more branch locations contribute to new firm creation. Overall competition, as measured by the total number of banking institutions, has a negative effect on firm creation. There is limited evidence that bank failures also have a negative impact on firm creation within the state. Copyright Springer Science+Business Media, LLC. 2012

Suggested Citation

  • Tammy Rogers, 2012. "Bank market structure and entrepreneurship," Small Business Economics, Springer, vol. 39(4), pages 909-920, November.
    • Handle: RePEc:kap:sbusec:v:39:y:2012:i:4:p:909-920
    DOI: 10.1007/s11187-011-9320-0
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    Cited by:

    1. Morgan, Horatio M., 2013. "Credit Unions, Consolidation and Business Formation: Evidence from Canadian provinces," MPRA Paper 52327, University Library of Munich, Germany.
    2. Ismaëlh Cissé & Jean Dubé & Cédric Brunelle, 2020. "New business location: how local characteristics influence individual location decision?," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 64(1), pages 185-214, February.
    3. Lorenzo Ardito & Rosa Maria Dangelico & Antonio Messeni Petruzzelli, 2021. "The link between female representation in the boards of directors and corporate social responsibility: Evidence from B corps," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 704-720, March.
    4. Mariarosaria Agostino & Lucia Errico & Sandro Rondinella & Francesco Trivieri, 2022. "Do cooperative banks matter for new business creation? Evidence on Italian manufacturing industry," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 637-675, September.
    5. Andres Jauregui & Kirk C. Heriot & David T. Mitchell, 2021. "Corruption and formal-sector entrepreneurship in a middle-income country: spatial analysis of firm births in the Mexican states," Small Business Economics, Springer, vol. 57(4), pages 1957-1972, December.
    6. Annalisa Croce & Diego D’Adda & Elisa Ughetto, 2015. "Venture capital financing and the financial distress risk of portfolio firms: How independent and bank-affiliated investors differ," Small Business Economics, Springer, vol. 44(1), pages 189-206, January.
    7. Duqi, Andi & McGowan, Danny & Onali, Enrico & Torluccio, Giuseppe, 2021. "Natural disasters and economic growth: The role of banking market structure," Journal of Corporate Finance, Elsevier, vol. 71(C).
    8. Morgan, Horatio M., 2013. "Credit Unions, Consolidation and Small Business Lending: Evidence from Canada," MPRA Paper 50813, University Library of Munich, Germany.
    9. Osama D. Sweidan, 2022. "Economic Freedom and Entrepreneurship Rate: Evidence from the U.S. States After the Great Recession," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(1), pages 111-127, March.
    10. Małgorzata Wosiek & Adam Czudec, 2019. "The Relationship between the Entrepreneurship and the Local Environment: Evidence from Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 262-289.

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    More about this item

    Keywords

    Entrepreneur; Banking market; Bank competition; Firm creation; Community bank; Relationship banking; C33; G18; G21; L16; L26; M13;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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