The Economic Impact of Changes in the Local Bank Presence

Hasan, Iftekhar and Jackowicz, Krzysztof and Kowalewski, Oskar and Kozlowski, Lukasz (2017): The Economic Impact of Changes in the Local Bank Presence.

Abstract

The study analyses the economic consequences of changes in the local bank presence. Using a unique dataset of banks, firms, and counties in Poland over the period 2009-2014, we show that changes in local banking that increase the role of the relationship banking model are associated with improvements in local labour markets and easier access of SMEs to bank debt. Moreover, radical changes in the ownership structure of large commercial banks result in a more rapid new firm creation. Finally, we document that young companies’ performance is more sensitive to the instability of local banking markets.

• Item Type: MPRA Paper
• Language: English
• Keywords: local economic activity, SMEs, entrepreneurship, local banks
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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