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Consolidation of Banks and Its Impact on Minority-Income Dynamics

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  • Salvador Contreras

    (University of Texas Rio Grande Valley)

  • Amit Ghosh

    (Texas A&M International University)

Abstract

A defining feature of the US banking industry is the persistent stream of mergers and acquisitions. This paper explores an important public policy issue: does bank M&A activity affect the income and employment dynamics of minority groups? Using 2005–2020 data from the ACS, we find that exposure to M&A activity likely affects the incomes and hourly wages of Asians and Hispanics and is positively associated with the hours worked by Asians and Blacks. We find that M&A activity is associated with an increase in the probability of Asians becoming self-employed and a decrease for Hispanics. Our findings are robust to the use of several identification strategies. These results are explained by the negative relationship between M&A activity and small business lending and credit supply.

Suggested Citation

  • Salvador Contreras & Amit Ghosh, 2025. "Consolidation of Banks and Its Impact on Minority-Income Dynamics," Journal of Economics, Race, and Policy, Springer, vol. 8(3), pages 233-256, September.
    • Handle: RePEc:spr:joerap:v:8:y:2025:i:3:d:10.1007_s41996-024-00164-0
    DOI: 10.1007/s41996-024-00164-0
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    References listed on IDEAS

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    More about this item

    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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