Bank Integration and Financial Constraints: Evidence from U.S. Firms

Serie

• International Finance Discussion Papers

Resumen

• This paper uses data on publicly-traded firms in the U.S. to analyze the effect of interstate bank integration on the financial constraints borrowers face. A firm-level investment equation is estimated in order to test if bank integration reduces the sensitivity of capital expenditures to the level of internal funds. The staggered deregulation of cross-state bank acquisitions that took place in the U.S. between 1978 and 1994 helps estimate the model. Integration decreases financing constraints for bank-dependent firms. The change in firms' access to external finance is explained by an increase in the share of locally headquartered geographically diversified banks.

autores

• Correa, Ricardo

fecha de publicación

• 2008

Área temática

• G21 - Bancos; Instituciones de depósito; Instituciones Microfinancieras; Hipotecas
• G28 - Instituciones y servicios financieros: Política pública y regulación
• G31 - Presupuesto de capital; Inversión fija y estudios de inventario; Capacidad

Enfoque geográfico

• Colombia  Country
• South America  Continent

Líneas de investigación

• Banking
• Banks
• Interstate Banking

Issue

• 925