Consolidation of Banks and Its Impact on Minority-Income Dynamics

Salvador Contreras () and Amit Ghosh ()
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Salvador Contreras: University of Texas Rio Grande Valley
Amit Ghosh: Texas A&M International University

Journal of Economics, Race, and Policy, 2025, vol. 8, issue 3, No 4, 233-256

Abstract: Abstract A defining feature of the US banking industry is the persistent stream of mergers and acquisitions. This paper explores an important public policy issue: does bank M&A activity affect the income and employment dynamics of minority groups? Using 2005–2020 data from the ACS, we find that exposure to M&A activity likely affects the incomes and hourly wages of Asians and Hispanics and is positively associated with the hours worked by Asians and Blacks. We find that M&A activity is associated with an increase in the probability of Asians becoming self-employed and a decrease for Hispanics. Our findings are robust to the use of several identification strategies. These results are explained by the negative relationship between M&A activity and small business lending and credit supply.

Keywords: M&A; Minorities; Income; Self-employment (search for similar items in EconPapers)
JEL-codes: D31 G21 G34 J31 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s41996-024-00164-0

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