Who needs big banks? The real effects of bank size on outcomes of large US borrowers

Biswas, Swarnava; Gómez, Fabiana; Zhai, Wei

doi:10.1016/j.jcorpfin.2017.06.012

Cited by 15 publications

(8 citation statements)

References 42 publications

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“…Therefore, the focus of this study is on bank size effect on bank performance in the SSA. Biswas et al (2017) examined the effect of bank size on firm value among borrowers in the United States (U.S.). The findings revealed a positive association between bank size and substantial weight following loan origination.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Bank Size and Financial Performance in Sub-Saharan Africa

Yahaya¹,

Shagari²,

Mohammed

2022

Malaysian Management Journal

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Bank size is one of the vital internal determinants of banking performance, although scholars hold contradictory views on bank size and its influence on performance. The aim is to examine the effect of bank size on quoted deposit money banks (DMBs) in the region of sub-Saharan Africa (SSA). The sample, collected over a period of nine years (2011-2019) included fifty listed commercial banks drawn from across the six sub-Saharan African countries, namely Nigeria, Ghana, South Africa, Zambia, Kenya, and Tanzania. The data were analyzed using a two-step system generalized method of moment (GMM). The finding revealed a significant and negative association between bank size and its financial performance. However, the smaller banks performed better when compared to their larger counterparts in the region. These findings seem to suggest that banks keep their capital level on the high side and minimize the rate of their non-performing loans in order to achieve more excellent banking performance within the region.

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Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Bank Size and Financial Performance in Sub-Saharan Africa

Yahaya¹,

Shagari²,

Mohammed

2022

Malaysian Management Journal

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“…6 In contrast, the banking reforms in postwar Germany increased bank size without directly deregulating local competition or entry. 7 A further difference is that I analyze state-level banks that 4 Some recent papers using cross-sectional data suggest that returns to scale might have increased over time (Feng and Serletis 2010;Wheelock andWilson 2012, 2018;Hughes and Mester 2013;Davies and Tracey 2014;Kovner et al 2014;Biswas et al 2017;Hughes et al 2019).…”

Section: Related Empirical Literaturementioning

confidence: 99%

Are Bigger Banks Better? Firm-Level Evidence from Germany

Huber

2021

Journal of Political Economy

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The effects of large banks on the real economy are theoretically ambiguous and politically controversial. I identify quasi-exogenous increases in bank size in postwar Germany. I show that firms did not grow faster after their relationship banks became bigger. In fact, opaque borrowers grew more slowly. The enlarged banks did not increase profits or efficiency, but worked with riskier borrowers. Bank managers benefited through higher salaries and media attention. The paper presents newly digitized microdata on German firms and their banks. Overall, the findings reveal that bigger banks do not always raise real growth and can actually harm some borrowers.

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“…We perform additional tests focusing on covariates that affect the ability of branches to provide financing. Large banks, as well as banks operating under a national charter, should be in a stronger position to alleviate financial constraints compared with smaller and local banks (Biswas, Gómez, and Zhai 2017). Similarly, transparent firms should have an advantage in terms of accessing capital.…”

Section: Heterogenous Effects Of Branch Density On Fraudmentioning

confidence: 99%

The Walls Have Ears: Local Information Environments and Corporate Fraud

Hagendorff¹,

Le²,

Nguyen³

2021

J of Money Credit Banking

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This paper shows that a firm's likelihood of committing corporate fraud is affected by the local information environment. We use the density of local bank branch networks as a proxy for the local information environment. We show that denser bank branch networks increase the likelihood of fraud detection, accelerate the detection of fraud, and decrease the fraud propensity of local firms. Our results cannot be explained by the clustering of firms in urban areas, geographic proximity to regulators, or other location effects. Overall, our study identifies a spatial dimension in the detection and prevention of corporate fraud.

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Who needs big banks? The real effects of bank size on outcomes of large US borrowers

Cited by 15 publications

References 42 publications

Bank Size and Financial Performance in Sub-Saharan Africa

Bank Size and Financial Performance in Sub-Saharan Africa

Are Bigger Banks Better? Firm-Level Evidence from Germany

The Walls Have Ears: Local Information Environments and Corporate Fraud

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