The Dynamics of Market Entry: The Effects of Mergers and Acquisitions on Entry in the Banking Industry

Allen Berger (), Seth D. Bonime, Lawrence G. Goldberg and Lawrence White
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Seth D. Bonime: Pepsi Corporation
Lawrence G. Goldberg: Department of Finance, University of Miami

The Journal of Business, 2004, vol. 77, issue 4, 797-834

Abstract: We study the dynamics of market entry following mergers and acquisitions (M&As) using banking industry data. The findings suggest that M&As are associated with statistically and economically significant increases in the probability of entry. The data suggest that M&As affect the proportion of the markets with entry by about 1020%. These findings also suggest that entry may be part of an "external" effect of M&As that helps supply credit to some relationship-dependent small business borrowers. Our results are robust to the use of alternative econometric methods, changes in specifications of the exogenous variables, and alteration of the data samples.

Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ucp:jnlbus:v:77:y:2004:i:4:p:797-834

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