The Dynamics of Market Entry : The Effects of Mergers and Acquisitions on Entry in the Banking Industry

We study the dynamics of market entry following mergers and acquisitions (Mamp;As) using banking industry data. The findings suggest that Mamp;As are associated with significant subsequent increases in the probability of entry and may explain more than 20% of entry in metropolitan markets, and more than 10% of entry in rural markets. These findings also suggest that entry may be part of an ?external? effect of Mamp;As that helps supply credit to some relationship-dependent small business borrowers. Our results are robust to use of alternative econometric methods, changes in specifications of the exogenous variables, and alteration of the data samples