The heterogeneous effects of bank mergers and acquisitions on credit to firms: evidence from Italian macro-regions
Silvia Del Prete (),
Cristina Demma (),
Iconio GarrÃ¬ (),
Marco Piazza () and
Giovanni Soggia ()
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Silvia Del Prete: Bank of Italy
Cristina Demma: Bank of Italy
Iconio GarrÃ¬: Bank of Italy
Marco Piazza: Bank of Italy
Giovanni Soggia: Bank of Italy
No 1382, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area
The literature has shown that in the short- and medium-term bank mergers and acquisitions (M&As) may generate a temporary reduction in firm credit. Using bank-firm matched data, this paper investigates the impact of M&As involving Italian banks over the period 2009-2019 on credit to firms, exploring possible heterogeneities across several dimensions. During a 3-year time window after each deal, we detect a reduction in loans to firms financed by target banks, in line with the existing evidence. The drop is smaller for infra-group mergers, when the target is healthy or is the firmâ€™s main bank, while is larger for southern firms, independently of bank location. Other things being equal, we suggest that this â€œSouth effectâ€ is mainly related to the negative externalities that characterize the business environment in Southern Italy, for which southern firms are more likely to be subject to a severe selection after a bank reorganization.
Keywords: business lending; mergers and acquisitions; banking systemâ€™s structure; North-South divide (search for similar items in EconPapers)
JEL-codes: D40 G10 G21 G34 L10 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-com, nep-eur and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1382_22
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