Locally Owned Bank Concentration and Business Start-Ups and Closures in U.S. Metropolitan, Micropolitan, and Rural Counties from 1980-2010

Access to financial capital is vital for the sustainability of the local business sector. Recent research on the restructuring of the financial industry from local owned banks to interstate conglomerates has raised questions about the impact on local economies, especially in rural areas. We examine...

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Bibliographic Details
Published in:	The Review of regional studies Vol. 50; no. 1; p. 17
Main Authors:	Carpenter, Craig Wesley, Mencken, F. Carson, Tolbert, Charles M., Lotspeich, Michael
Format:	Journal Article
Language:	English
Published:	New Brunswick Southern Regional Science Association 22-12-2019
Subjects:	Rural areas United States > US
Online Access:	Get full text
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Summary:	Access to financial capital is vital for the sustainability of the local business sector. Recent research on the restructuring of the financial industry from local owned banks to interstate conglomerates has raised questions about the impact on local economies, especially in rural areas. We examine the impact of bank ownership concentration on business formations, continuations, and deaths in metropolitan, micropolitan, and rural non-core U.S. counties. Using limited-access Census data, we find that local bank concentration is positively related to business births and deaths, or churn, in rural counties, but the opposite effects occur in metropolitan areas. We demonstrate robustness to several specifications and spatial spillover effects.
ISSN:	0048-749X 1553-0892
DOI:	10.52324/001c.11479