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The Dymanics of Market Entry: The Effects of Mergers and Acquisitions on De Novo Entry and Small Business Lending in the Banking Industry,

Authors: Berger, Allen N.
Bonime, Seth D.
Goldberg, Lawrence G.
White, Lawrence J.
Keywords: Entry;Barriers to Entry;Bank;Mergers;Small Business
Issue Date: Jul-1999
Series/Report no.: EC-99-13
Abstract: We study the dynamics of market entry following mergers and acquisitions (M&As), and the behavior of recent entrants in supplying output that might be withdrawn by the consolidating firms. The data, drawn from the banking industry, suggests that M&As are associated with subsequent increases in the probability of entry. The estimates suggest that M&As explain more than 20% of entry in metropolitan markets, and more than 10% of entry in rural markets. Additional results suggest that bank age has a strong negative effect on the small business lending of small banks, but that M&As have little influence on this lending.
Appears in Collections:Economics Working Papers

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