It’s a wonderful loan: local financial composition, community banks, and economic resilience

Bank on it: Do Local Banks Contribute to Rural Community Prosperity?*

“…Therefore, it is advisable to explore the question between bank ownership/concentration at a higher and acceptable unit of aggregation (i.e., CZ). What these multiple levels of data analysis do show, however, is that local banking matters, whether at the network level (Kilkenny and Nalbarte 2002), county level (Carpenter et al 2020;Petach et al 2021) or CZ level (our current study).…”

“…Mergers of bank firms led to fewer multi‐site bank firms, but a greater number of establishments/branches of larger banks (Cetorelli and Strahan 2006; DeYoung et al 2019). What has concerned rural economic development specialists is the impact this ongoing financial sector restructuring is having on local banks in nonmetropolitan spaces (Kandilov and Kandilov 2018; Petach, Weiler, and Conroy 2021; Schneiberg and Parmentier 2022). Tolbert et al (2014) report that between 1976 and 2011, the percentage of local banks (banks in which the bank headquarters and all branches are in the same county) in rural counties declined from 75 percent to less than a 30 percent share.…”

“…The loss of local banks has raised concerns about the impact this restructuring has had on nonmetropolitan economic growth and development. An emerging volume of literature addresses many of these concerns (DeYoung et al 2019; Petach et al 2021). The findings from these efforts generally support the claim that locally oriented banking presence is important for the well‐being of nonmetropolitan economies.…”

Bank Types, Inclusivity, and Paycheck Protection Program Lending During COVID-19

“…To tap the racial characteristics of communities, we follow the Federal Reserve Bank of New York ( Mills & Battisto, 2020 ) and create a dummy variable for minority communities (MajMin) where more than half the population in the ZCTA is not White. Finally, to control for conditions in banking markets that served communities, we follow Schneiberg and Parmentier (2021) , Petach et al (2021) , and Li and Strahan (2021) and use county-level measures for banking markets but replicate our approach using commuter zones. We calculate branch-establishment ratios (number of bank and credit union branches per county over the number of establishments) to control for the overall coverage or lending capacity of local banking markets and counts of each lender type to control for the prevalence and availability of institutions of any given type in local markets.…”

Dissemination of Economic Resilience in Scientific Evolution to Strengthen Community Economy in Facing Covid-19 Pandemic Through Bibliometric Analysis

“…Several solutions are needed to get a solution to the problems encountered during the pandemic, especially in creating effective economic resilience that has been carried out by experts, including among others according to Dormady et al (2021), who stated that economic resilience is needed in the face of catastrophic events to reduce losses arising from business disruptions by increasing stability and continuity of operations. Other experts have also provided solutions that are expected to provide a solution in creating economic resilience, including the existence of a community bank has a significant impact on regional economic resilience during a recession that causes macroeconomic shocks that affect development outcomes in the region that occur (Petach et al, 2021), it takes an economic stochastic scheduling that integrates an economic perspective that is carried out together with a resilience function by utilizing a multi-objective mixed-integer linear programming method (Younesi et al, 2021), social-environmental system resilience through complex adaptive systems as part of regional economic capacity is helpful in responding to crises and resetting to determine changes that promote future development options (Egidi & Salvati, 2020), financial inclusion is used to obtain financing and business investment is able to reduce the level of vulnerability of different people's background conditions and lead to efforts to increase economic resilience (Pomeroy et al, 2020). In addition, the digital economy has business resilience.…”