Bank Consolidation and Soft Information Acquisition in Small Business Lending

Yoshiaki Ogura and Hirofumi Uchida

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We empirically examine the impact of bank consolidation on bankers' acquisition of soft information about borrowers. Using a dataset of small businesses, we found that bank mergers have a negative impact on soft information acquisition by small banks while those by large banks that have less interest in acquiring soft information irrespective of mergers have no impact. Detailed analyses of the post-merger organizational restructuring show that the measures of an increase in organizational complexity have a negative and significant impact on soft information acquisition by small banks, while the measures of cost-cut do not have any significant impact on soft information acquisition. This result implies that the increase in organizational complexity by bank mergers hindered soft information acquisition, which is consistent with Stein's prediction [2002, J. Fin.] on the comparative advantage of simple and flat organizations in acquiring and processing soft information.

Pages: 39 pages
Date: 2007-06
New Economics Papers: this item is included in nep-ban, nep-bec and nep-com
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/07e037.pdf (application/pdf)

Related works:
Journal Article: Bank Consolidation and Soft Information Acquisition in Small Business Lending (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:07037

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().