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Counterfactual analysis of bank mergers

Pedro Barros (), Diana Bonfim (), Moshe Kim () and Nuno Martins ()

Empirical Economics, 2014, vol. 46, issue 1, 361-391

Abstract: We introduce a counterfactual analysis of banks mergers, combining the pre-merger equilibrium setting with post-merger environmental characteristics, while accounting for endogenously propagated changes in market structure. Using this procedure we are able to estimate the effects on loan flows and interest rates that would have been observed if the pre-merger equilibrium was not altered. Results are obtained for firms, households, and banks inside and outside the merging circles separately. We find that mergers increased firms’ access to credit, but had an opposite effect on households and led to a widespread decrease in interest rates. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Banks; Mergers; Counterfactual; Competition; G21; G34; L10 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Counterfactual Analysis of Bank Mergers (2010) Downloads
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