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 language | English |
|---|---|
| Pages (from-to) | 173-200 |
| Number of pages | 28 |
| Journal | Journal of Financial Services Research |
| Volume | 45 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2014 Apr |
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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 journal › Article
}
TY - JOUR
T1 - Bank Consolidation and Soft Information Acquisition in Small Business Lending
AU - Ogura, Yoshiaki
AU - Uchida, Hirofumi
PY - 2014/4
Y1 - 2014/4
N2 - 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.
AB - 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.
KW - Bank consolidation
KW - Bank merger
KW - Decision authority
KW - Information acquisition
UR - http://www.scopus.com/inward/record.url?scp=84897642293&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84897642293&partnerID=8YFLogxK
U2 - 10.1007/s10693-013-0163-5
DO - 10.1007/s10693-013-0163-5
M3 - Article
AN - SCOPUS:84897642293
VL - 45
SP - 173
EP - 200
JO - Journal of Financial Services Research
JF - Journal of Financial Services Research
SN - 0920-8550
IS - 2
ER -