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Essays on Information Transmission Mechanisms

thesis
posted on 05.11.2021, 20:26 by Aluna Wang
I exploit hand-collected data on bank merger deals and cross-sectional variation in borrower exposure to merger partners to study the effect of bank mergers on lending relationships. Using loan level data, I find that borrowers that have pre-merger relationships with the target bank are much
less likely to access credit from the merged bank. Using a novel measure of soft information used in loan decisions, I show this effect is stronger for lending relationships in which soft information is more important, suggesting that banks organizational restructuring affects their information
processing and debt contracting. Moreover, firms having pre-merger relationships with target banks suffer from relationship disruptions: they reduce investment and lay off employees when facing financial shocks.

History

Date

12/04/2021

Degree Type

Dissertation

Department

Tepper School of Business

Degree Name

  • Doctor of Philosophy (PhD)

Advisor(s)

Stephen Karolyi Jinghong Pierre Liang

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