Portal de Periódicos da CAPES

The heterogeneous effects of bank mergers and acquisitions on credit to firms: evidence from Italian macro-regions

2023; RELX Group (Netherlands); Linguagem: Inglês

10.2139/ssrn.4346869

1556-5068

Silvia Del Prete, Cristina Demma, Iconio Garrì, Marco Piazza, Giovanni Soggia,

Italy: Economic History and Contemporary Issues

The literature has shown that in the short- and medium-term bank mergers and acquisitions (M&As) may generate a temporary reduction in firm credit. Using bank-firm matched data, this paper investigates the impact of M&As involving Italian banks over the period 2009-2019 on credit to firms, exploring possible heterogeneities across several dimensions. During a 3-year time window after each deal, we detect a reduction in loans to firms financed by target banks, in line with the existing evidence. The drop is smaller for infra-group mergers, when the target is healthy or is the firm's main bank, while is larger for southern firms, independently of bank location. Other things being equal, we suggest that this "South effect" is mainly related to the negative externalities that characterize the business environment in Southern Italy, for which southern firms are more likely to be subject to a severe selection after a bank reorganization.