Industry Specialization and Small Business Lending

Wenhua Di and Nathaniel Pattison

Journal of Banking & Finance, 2023, vol. 149, issue C

Abstract: This paper examines the rise and competitive impact of industry-specialized small business lenders. Using loan-level data with detailed industry codes from the Small Business Administration (SBA), we document a recent increase in lenders that originate loans nationally but to a limited number of industries. We then examine the impact of these industry-specialized lenders on credit availability and banking competition. Exploiting the staggered entry of a large, specialized lender, we find significant increases in total SBA-backed lending with no evidence of substitution from other lenders. We then explore potential mechanisms behind the increase in lending.

Keywords: Small Business Lending; Banking Competition; Specialization; Distance in Lending; Credit Access (search for similar items in EconPapers)
JEL-codes: G21 G23 L11 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:149:y:2023:i:c:s0378426623000249

DOI: 10.1016/j.jbankfin.2023.106797

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