Small Business Lending and the Bank-Branch Network

Ivan Petkov

MPRA Paper from University Library of Munich, Germany

Abstract: I tests whether the market for small business lending is integrated by examining the exposure of different credit markets to localized economic shocks when they host the same bank network. In a unified approach I quantify the effect of a positive and a negative credit-supply on local activity. I show that the market for business loans provided by smaller banks is locally segmented. Businesses in areas with increased credit were not able to expand earlier with funds from other banks and were forced to wait for funding from their local banker. Businesses in areas with reduced credit were forced to lower their activity unable to substitute funding lost to more profitable projects elsewhere.

Keywords: Small Business Lending; Market Segmentation; Bank-branch Network; Lending Channel; Energy Boom; Real Estate Boom (search for similar items in EconPapers)
JEL-codes: E51 G21 R12 (search for similar items in EconPapers)
Date: 2015-01-14, Revised 2017-10-13
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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https://mpra.ub.uni-muenchen.de/85762/1/petkov_sblnetowrk.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/97477/9/MPRA_paper_97477.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:85762

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