Staying, dropping, or switching: the impacts of bank mergers on small firms

Hans Degryse, Nancy Masschelein () and Janet Mitchell ()
Additional contact information
Nancy Masschelein: National Bank of Belgium, Financial Department
Janet Mitchell: National Bank of Belgium, Financial Department

No 179, Working Paper Research from National Bank of Belgium

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 relationship. 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

Keywords: Bank mergers; bank lending relationships; SME loans (search for similar items in EconPapers)
JEL-codes: G21 G28 G34 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2009-10
New Economics Papers: this item is included in nep-ban and nep-com
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https://www.nbb.be/doc/ts/publications/wp/wp179en.pdf (application/pdf)

Related works:
Journal Article: Staying, Dropping, or Switching: The Impacts of Bank Mergers on Small Firms (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:200910-26

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