Are Credit Markets Still Local? Evidence from Bank Branch Closings

• 成果类型: Article
• 署名作者: Nguyen, Hoai-Luu Q.
• 署名单位: University of California System; University of California Berkeley
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.20170543
• 发表日期: 2019
• 页码: 1-32
• 关键词: firm-level evidence; lending relationships; consolidation; distance; mergers; INFORMATION; proximity; GROWTH; access; size

摘要

This paper studies whether distance shapes credit allocation by estimating the impact of bank branch closings during the 2000s on local access to credit. To generate plausibly exogenous variation in the incidence of closings, I use an instrument based on within-county, tract-level variation in exposure to post-merger branch consolidation. Closings lead to a persistent decline in local small business lending. Annual originations fall by $453,000 after a closing, off a baseline of $4.7 million, and remain depressed for up to six years. The effects are very localized, dissipating within six miles, and are especially severe during the financial crisis.