Winners or Losers? The Effects of Banking Consolidation on Corporate Borrowers
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. Copyright 2007 by The American Finance Association.
Year of publication: |
2007
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Authors: | PATTI, EMILIA BONACCORSI DI ; GOBBI, GIORGIO |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 62.2007, 2, p. 669-695
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Publisher: |
American Finance Association - AFA |
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