Mergers and bank branches: two decades of evidence from the USA

In recent decades, the US bank market has been exposed to several waves of mergers, resulting in concerns about branch presence and consumer access to financial services. This paper examines the effects of bank mergers on branch density in the period 2000-2020. To do so, we use panel regressions and...

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Detalhes bibliográficos
Autores: Calzada, Joan, Fageda, Xavier, 1975-, Martínez Santos, Fernando
Formato: artículo
Estado:Versión aceptada para publicación
Fecha de publicación:2023
País:España
Recursos:Universidad de Barcelona
Repositorio:Dipòsit Digital de la UB
OAI Identifier:oai:diposit.ub.edu:2445/197623
Acesso em linha:https://hdl.handle.net/2445/197623
Access Level:acceso abierto
Palavra-chave:Bancs
Fusió d'empreses
Operacions bancàries
Crisi econòmica, 2008-2009
Banks
Consolidation and merger of corporations
Bank transactions
Global Financial Crisis, 2008-2009
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oai_identifier_str oai:diposit.ub.edu:2445/197623
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spelling Mergers and bank branches: two decades of evidence from the USACalzada, JoanFageda, Xavier, 1975-Martínez Santos, FernandoBancsFusió d'empresesOperacions bancàriesCrisi econòmica, 2008-2009BanksConsolidation and merger of corporationsBank transactionsGlobal Financial Crisis, 2008-2009In recent decades, the US bank market has been exposed to several waves of mergers, resulting in concerns about branch presence and consumer access to financial services. This paper examines the effects of bank mergers on branch density in the period 2000-2020. To do so, we use panel regressions and matching techniques at the census tract level to study the impact of inter- and intra-state mergers before and after the Great Recession of 2007. To generate plausible exogenous variation for mergers, our analysis focuses on transactions involving large entities and we consider the within-tract variation in exposure to mergers. A comparison of exposed and unexposed tracts shows that in the period under study mergers reduced branch density by around 3%. Moreover, interstate mergers reduced branch density at the tract level across the whole period, but had a expansionary effect on the number of branches at the county level before the crisis. Intrastate mergers, in contrast, had an effect of branch consolidation across the whole period, an effect that was more intense in rural tracts and in tracts where merging entities operated overlapping branch networks. Finally, we show that this elimination of bank branches was stronger in tracts with a relatively higher penetration of broadband Internet services, but we find no evidence that the adoption of FinTech services intensified branch closures.Springer Verlag2023info:eu-repo/semantics/articleinfo:eu-repo/semantics/acceptedVersionapplication/pdfhttps://hdl.handle.net/2445/197623Articles publicats en revistes (Economia)reponame:Dipòsit Digital de la UBinstname:Universidad de BarcelonaInglésReproducció del document publicat a: https://doi.org/10.1007/s00181-022-02307-4Empirical Economics, 2023, vol. 64, p. 2411-2447https://doi.org/10.1007/s00181-022-02307-4(c) Springer Verlag, 2023http://creativecommons.org/licenses/by/3.0/es/info:eu-repo/semantics/openAccessoai:diposit.ub.edu:2445/1976232026-05-27T06:46:51Z
dc.title.none.fl_str_mv Mergers and bank branches: two decades of evidence from the USA
title Mergers and bank branches: two decades of evidence from the USA
spellingShingle Mergers and bank branches: two decades of evidence from the USA
Calzada, Joan
Bancs
Fusió d'empreses
Operacions bancàries
Crisi econòmica, 2008-2009
Banks
Consolidation and merger of corporations
Bank transactions
Global Financial Crisis, 2008-2009
title_short Mergers and bank branches: two decades of evidence from the USA
title_full Mergers and bank branches: two decades of evidence from the USA
title_fullStr Mergers and bank branches: two decades of evidence from the USA
title_full_unstemmed Mergers and bank branches: two decades of evidence from the USA
title_sort Mergers and bank branches: two decades of evidence from the USA
dc.creator.none.fl_str_mv Calzada, Joan
Fageda, Xavier, 1975-
Martínez Santos, Fernando
author Calzada, Joan
author_facet Calzada, Joan
Fageda, Xavier, 1975-
Martínez Santos, Fernando
author_role author
author2 Fageda, Xavier, 1975-
Martínez Santos, Fernando
author2_role author
author
dc.subject.none.fl_str_mv Bancs
Fusió d'empreses
Operacions bancàries
Crisi econòmica, 2008-2009
Banks
Consolidation and merger of corporations
Bank transactions
Global Financial Crisis, 2008-2009
topic Bancs
Fusió d'empreses
Operacions bancàries
Crisi econòmica, 2008-2009
Banks
Consolidation and merger of corporations
Bank transactions
Global Financial Crisis, 2008-2009
description In recent decades, the US bank market has been exposed to several waves of mergers, resulting in concerns about branch presence and consumer access to financial services. This paper examines the effects of bank mergers on branch density in the period 2000-2020. To do so, we use panel regressions and matching techniques at the census tract level to study the impact of inter- and intra-state mergers before and after the Great Recession of 2007. To generate plausible exogenous variation for mergers, our analysis focuses on transactions involving large entities and we consider the within-tract variation in exposure to mergers. A comparison of exposed and unexposed tracts shows that in the period under study mergers reduced branch density by around 3%. Moreover, interstate mergers reduced branch density at the tract level across the whole period, but had a expansionary effect on the number of branches at the county level before the crisis. Intrastate mergers, in contrast, had an effect of branch consolidation across the whole period, an effect that was more intense in rural tracts and in tracts where merging entities operated overlapping branch networks. Finally, we show that this elimination of bank branches was stronger in tracts with a relatively higher penetration of broadband Internet services, but we find no evidence that the adoption of FinTech services intensified branch closures.
publishDate 2023
dc.date.none.fl_str_mv 2023
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/acceptedVersion
format article
status_str acceptedVersion
dc.identifier.none.fl_str_mv https://hdl.handle.net/2445/197623
url https://hdl.handle.net/2445/197623
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.relation.none.fl_str_mv Reproducció del document publicat a: https://doi.org/10.1007/s00181-022-02307-4
Empirical Economics, 2023, vol. 64, p. 2411-2447
https://doi.org/10.1007/s00181-022-02307-4
dc.rights.none.fl_str_mv (c) Springer Verlag, 2023
http://creativecommons.org/licenses/by/3.0/es/
info:eu-repo/semantics/openAccess
rights_invalid_str_mv (c) Springer Verlag, 2023
http://creativecommons.org/licenses/by/3.0/es/
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Springer Verlag
publisher.none.fl_str_mv Springer Verlag
dc.source.none.fl_str_mv Articles publicats en revistes (Economia)
reponame:Dipòsit Digital de la UB
instname:Universidad de Barcelona
instname_str Universidad de Barcelona
reponame_str Dipòsit Digital de la UB
collection Dipòsit Digital de la UB
repository.name.fl_str_mv
repository.mail.fl_str_mv
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score 15.300719

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