Working Paper

Life-cycle dynamics in industrial sectors. The role of banking market structure


Abstract: This paper analyzes the role of bank competition on the life-cycle dynamics of non-financial industries. Using multi-dimensional data sets, which contain information on job creation and destruction for establishments in U.S. manufacturing sectors operating in different geographical regions and over time, I find evidence that bank competition accelerates the expansion of start-ups and helps them to thrive while young. Once these establishments are mature, however, less competitive banking markets are more propitious. Specifically, mature establishments expand at higher rates and exit the industry at a slower pace in less competitive banking markets.

Keywords: Bank competition; Banking market; Manufactures;

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Authors

    Cetorelli, Nicola

Bibliographic Information

Provider: Federal Reserve Bank of Chicago

Part of Series: Working Paper Series

Publication Date: 2002

Number: WP-02-26