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New Bank Start-Ups: Entrepreneurs Funding Other Entrepreneurs

Author

Listed:
  • Robert DeYoung

    (Federal Reserve Bank of Chicago)

Abstract

There has traditionally been a symbiotic link between new business ventures and new banking ventures. This article finds that the traditional link between small businesses and small banks – the small business loan – has weakened in recent years. While new banks have intensified their reliance on small business customers, small business borrowers have become less reliant on small banks for their credit needs. These findings are consistent with rapid changes in the structure of the banking industry, financial instruments and markets, and communications and information technology over the past two decades.

Suggested Citation

  • Robert DeYoung, 2002. "New Bank Start-Ups: Entrepreneurs Funding Other Entrepreneurs," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 7(3), pages 61-76, Fall.
  • Handle: RePEc:pep:journl:v:7:y:2002:i:3:p:61-76
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    File URL: http://jefsite.org/RePEc/pep/journl/jef-2002-07-3-f-deyoung.pdf
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    References listed on IDEAS

    as
    1. N. Berger, Allen & F. Udell, Gregory, 1998. "The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 613-673, August.
    2. Mitchell A. Petersen & Raghuram G. Rajan, 1995. "The Effect of Credit Market Competition on Lending Relationships," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 407-443.
    3. Allen Berger & Robert DeYoung, 2001. "The Effects of Geographic Expansion on Bank Efficiency," Journal of Financial Services Research, Springer;Western Finance Association, vol. 19(2), pages 163-184, April.
    4. Strahan, Philip E. & Weston, James P., 1998. "Small business lending and the changing structure of the banking industry1," Journal of Banking & Finance, Elsevier, vol. 22(6-8), pages 821-845, August.
    5. Douglas D. Evanoff & Evren Ors, 2002. "Local market consolidation and bank productive efficiency," Working Paper Series WP-02-25, Federal Reserve Bank of Chicago.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Iftekhar Hasan & Krzysztof Jackowicz & Oskar Kowalewksi & Lukasz Kozlowski, 2017. "The Economic Impact of Changes in the Local Bank Presence," Working Papers 2017-ACF-01, IESEG School of Management.
    2. repec:eee:jbfina:v:79:y:2017:i:c:p:142-158 is not listed on IDEAS

    More about this item

    Keywords

    Banks; New Banks; Bank Startups; Entrepreneur;

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

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