Small Business Lending and Bank Consolidation

This paper examines the relationship between market concentration in banking and the quantity of loans available to small businesses. Using data on origination of small business loans and deposit market share from the Community Reinvestment Act (CRA) and the Federal Deposit Insurance Corporation (FDIC) respectively, I evaluate the relationship between concentration and small business lending. This analysis uses panel data across all 50 states and D.C with entity and time fixed effects to control for variation across jurisdictions and business cycles. The results show a statistically significant negative relationship between the small business lending measure and bank market concentration. However, further research and data collection is needed to better understand this relationship. (JEL Classification Codes: G21, G28, G34, G38)

Author

• Mueller-Oden, Luke

Language

• English

Keyword

• Market concentration
• Banking
• Small business loans

Date created

• 2021

Type of Work

• Article

License

• All rights reserved

Rights statement

• In Copyright

GW Unit

• Student Organization

Persistent URL

•  https://scholarspace.library.gwu.edu/work/b5644s319

In Collection:

• The Capitol Economics Journal

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