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Bank market structure and entrepreneurship

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Abstract

This paper investigates the impact of bank market structure differences within U.S. states on entrepreneurial activity. A panel model is used to evaluate differences in new firm starts within the states relative to the bank market structure and competition. The results indicate that states with more small banks, as measured by the number of unit banks, and banks with more branch locations contribute to new firm creation. Overall competition, as measured by the total number of banking institutions, has a negative effect on firm creation. There is limited evidence that bank failures also have a negative impact on firm creation within the state.

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Authors and Affiliations

  1. Department of Economics, Finance, and Insurance & Risk Management (EFIRM), University of Central Arkansas, 201 Donaghey Avenue, Conway, AR, 72035, USA

    Tammy M. Rogers

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  1. Tammy M. Rogers
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Correspondence to Tammy M. Rogers.

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Rogers, T.M. Bank market structure and entrepreneurship. Small Bus Econ 39, 909–920 (2012). https://doi.org/10.1007/s11187-011-9320-0

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