Bank Consolidation and Soft Information Acquisition in Small Business Lending

Yoshiaki Ogura, Hirofumi Uchida

    Research output: Contribution to journalArticle

    10 Citations (Scopus)

    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.

    Original languageEnglish
    Pages (from-to)173-200
    Number of pages28
    JournalJournal of Financial Services Research
    Volume45
    Issue number2
    DOIs
    Publication statusPublished - 2014 Apr

    Fingerprint

    Bank consolidation
    Mergers
    Information acquisition
    Small business lending
    Soft information
    Financing
    Costs
    Comparative advantage
    Bank acquisitions
    Small business
    Organizational complexity
    Organizational theory

    Keywords

    • Bank consolidation
    • Bank merger
    • Decision authority
    • Information acquisition

    ASJC Scopus subject areas

    • Finance
    • Accounting
    • Economics and Econometrics

    Cite this

    Bank Consolidation and Soft Information Acquisition in Small Business Lending. / Ogura, Yoshiaki; Uchida, Hirofumi.

    In: Journal of Financial Services Research, Vol. 45, No. 2, 04.2014, p. 173-200.

    Research output: Contribution to journalArticle

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