Bank Consolidation and Soft Information Acquisition in Small Business Lending

Posted: 8 Jun 2017

See all articles by Yoshiaki Ogura

Yoshiaki Ogura

Waseda University, Faculty of Political Science and Economics

Hirofumi Uchida

Kobe University - Graduate School of Business Administration

Date Written: 2014

Abstract

We empirically examine the impact of bank consolidation on bank acquisition of soft information about borrowers. Using a dataset of small business financing, we find that mergers of small banks have a negative impact on soft information acquisition, whereas mergers of large banks have no impact. We also find some evidence that an increase in organizational complexity upon a merger, rather than a post-merger cost-cut, is likely to cause a negative and significant impact on soft information acquisition by small banks. These findings are consistent with the organizational theory that predicts a comparative advantage of simple and flat organizations in acquiring and processing soft information.

Keywords: Bank consolidation, Bank merger, Decision authority, Information acquisition

JEL Classification: G21, G34, L22, L14, D82

Suggested Citation

Ogura, Yoshiaki and Uchida, Hirofumi, Bank Consolidation and Soft Information Acquisition in Small Business Lending (2014). Journal of Financial Services Research, vol. 49, pp. 173-200, 2014., Available at SSRN: https://ssrn.com/abstract=2982300

Yoshiaki Ogura

Waseda University, Faculty of Political Science and Economics ( email )

1-6-1 Nishi-waseda, Shinjuku-ku
Tokyo
Japan

Hirofumi Uchida (Contact Author)

Kobe University - Graduate School of Business Administration ( email )

2-1, Rokkodai-cho, Nada-ku
Kobe, 657-8501
Japan
81-78-803-6949 (Phone)

HOME PAGE: http://www.b.kobe-u.ac.jp/~uchida

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
248
PlumX Metrics