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Staying, dropping, or switching: the impacts of bank mergers on small firms. NBB Working Paper 179, October 2009

Degryse, Hans and Masschelein, Nancy and Mitchell, Janet. (2009) Staying, dropping, or switching: the impacts of bank mergers on small firms. NBB Working Paper 179, October 2009. [Working Paper]

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    Abstract

    Assessing 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 relationships. 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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    Item Type: Working Paper
    Uncontrolled Keywords: Bank mergers, bank lending relationships, SME loans.
    Subjects for non-EU documents: Countries > Belgium
    EU policies and themes > Policies & related activities > economic and financial affairs > Single Market > capital, goods, services, workers
    Subjects for EU documents: UNSPECIFIED
    EU Series: UNSPECIFIED
    ["eprint_fieldname_eusries" not defined]: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > National Bank of Belgium (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 29 Oct 2009
    Page Range: p. 45
    Last Modified: 15 Feb 2011 18:17
    URI: http://aei.pitt.edu/id/eprint/11879

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