| Finance and Economics Discussion Series |
|---|
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The Dynamics of Market Entry: The Effects of Mergers and Acquisitions on De Novo Entry and Small Business Lending in the Banking Industry Allen N. Berger, Seth D. Bonime, Lawrence G. Goldberg, and Lawrence J. White 1999-41 |
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recent entrants in supplying output that might be withdrawn by the consolidating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, suggest 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.
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Last update: September 29, 1999