Journal of Finance Vol. 62 No. 2 2007
Winners or Losers? The Effects of Banking Consolidation on Corporate Borrowers
open access
Abstract
We estimate the impact of bank mergers and acquisitions (M&As) on outstanding credit, credit lines, and the sensitivity of investment to cash flow using a large sample of Italian corporate borrowers. We distinguish between firms that experienced relationship termination as a consequence of bank M&As and those that did not. Our findings are consistent with bank M&As having an adverse effect on credit, particularly when the M&A is followed by relationship termination. The effect persists 3 years and then is absorbed, suggesting that firms are able to compensate for the negative shock.
- DOI
- 10.1111/j.1540-6261.2007.01220.x
- Volume
- 62
- Issue
- 2
- Pages
- 669-695
- Language
- en
- Sources
- openalex bibtex:phds-export.bib crossref