Where You Live Matters: Local Bank Competition, Online Marketplace Lending, and Disparity in Borrower Benefits

References

• Acharya VV, Berger AN, Roman RA (2018) Lending implications of US bank stress tests: Costs or benefits? J. Financial Intermediation 34:58–90.Crossref, Google Scholar
• Adams RM, Amel DF (2011) Market structure and the pass-through of the federal funds rate. J. Banking Finance 35(5):1087–1096.Crossref, Google Scholar
• Agarwal S, Hauswald R (2010) Distance and private information in lending. Rev. Financial Stud. 23(7):2757–2788.Crossref, Google Scholar
• Aguirregabiria V, Clark R, Wang H (2016) Diversification of geographic risk in retail bank networks: Evidence from bank expansion after the Riegle‐Neal Act. RAND J. Econom. 47(3):529–572.Crossref, Google Scholar
• Ambrose BW, Capone CA (1998) Modeling the conditional probability of foreclosure in the context of single-family mortgage default resolutions. Real Estate Econom. 26(3):391–429.Crossref, Google Scholar
• Amel DF, Starr-McCluer M (2002) Market definition in banking: Recent evidence. Antitrust Bull. 47(1):63–89.Crossref, Google Scholar
• Anderson R, VanderHoff J (1999) Mortgage default rates and borrower race. J. Real Estate Res. 18(2):279–289.Crossref, Google Scholar
• Beck T, Demirgüç-Kunt A, Maksimovic V (2004) Bank competition and access to finance: International evidence. J. Money Credit Banking 36(3):627–648.Crossref, Google Scholar
• Becker B (2007) Geographical segmentation of US capital markets. J. Financial Econom. 85(1):151–178.Crossref, Google Scholar
• Berger AN, Demirgüç-Kunt A, Levine R, Haubrich JG (2004) Bank concentration and competition: An evolution in the making. J. Money Credit Banking 36(3):433–451.Crossref, Google Scholar
• Berkovich E (2011) Search and herding effects in peer-to-peer lending: Evidence from Prosper.com. Ann. Finance 7(3):389–405.Crossref, Google Scholar
• Blumberg D (2019) FinTechs continue to drive personal loan growth. TransUnion. Accessed February 21, 2021, https:// newsroom.transunion.com/fintechs-continue-to-drive-personal-loans-to-record-levels/.Google Scholar
• Brynjolfsson E, Hu YJ, Rahman MS (2009) Battle of the retail channels: How product selection and geography drive cross-channel competition. Management Sci. 55(11):1755–1765.Link, Google Scholar
• Butler AW, Cornaggia J (2011) Does access to external finance improve productivity? Evidence from a natural experiment. J. Financial Econom. 99(1):184–203.Crossref, Google Scholar
• Butler AW, Cornaggia J, Gurun UG (2016) Do local capital market conditions affect consumers borrowing decisions? Management Sci. 63(12):4175–4187.Link, Google Scholar
• Celerier C, Matray A (2019) Bank-branch supply, financial inclusion, and wealth accumulation. Rev. Financial Stud. 32(12):4767–4809.Google Scholar
• Cetorelli N, Strahan PE (2006) Finance as a barrier to entry: Bank competition and industry structure in local U.S. Markets. J. Finance 61(1):437–461.Crossref, Google Scholar
• Chevalier JA (1995) Capital structure and product-market competition: Empirical evidence from the supermarket industry. Amer. Econom. Rev. 85(3):415–435.Google Scholar
• Cortés KR, Demyanyk Y, Li L, Loutskina E, Strahan PE (2020) Stress tests and small business lending. J. Financial Econom. 136(1):260–279.Crossref, Google Scholar
• Cyrnak AW, Hannan TH (1999) Is the cluster still valid in defining banking markets? Evidence from a new data source. Antitrust Bull. 44:313.Google Scholar
• Degryse H, Ongena S (2005) Distance, lending relationships, and competition. J. Finance 60(1):231–266.Crossref, Google Scholar
• Dick AA (2006) Nationwide branching and its impact on market structure, quality, and bank performance. J. Bus. 79(2):567–592.Crossref, Google Scholar
• Dick AA (2007) Market size, service quality, and competition in banking. J. Money 39(1):49–81.Crossref, Google Scholar
• Drover W, Wood MS, Zacharakis A (2017) Attributes of angel and crowdfunded investments as determinants of VC screening decisions. Entrepreneurship Theory Practice 41(3):323–347.Crossref, Google Scholar
• Elliehausen GE, Wolken JD (1992) Banking markets and the use of financial services by households. Federal Reserve Bull. 78:169.Google Scholar
• Forman C, Ghose A, Goldfarb A (2009) Competition between local and electronic markets: How the benefit of buying online depends on where you live. Management Sci. 55(1):47–57.Link, Google Scholar
• Fraisse H, Johan H, Mathias L (2018) The competitive effect of a bank megamerger on credit supply. J. Banking Finance 93:151–161.Crossref, Google Scholar
• Goetz MR, Laeven L, Levine R (2013) Identifying the valuation effects and agency costs of corporate diversification: Evidence from the geographic diversification of US banks. Rev. Financial Stud. 26(7):1787–1823.Crossref, Google Scholar
• Goetz MR, Laeven L, Levine R (2016) Does the geographic expansion of banks reduce risk? J. Financial Econom. 120(2):346–362.Crossref, Google Scholar
• Hannan TH, Prager RA (2004) The competitive implications of multimarket bank branching. J. Banking Finance 28(8):1889–1914.Crossref, Google Scholar
• Ho DE, Imai K, King G, Stuart EA (2007) Matching as nonparametric preprocessing for reducing model dependence in parametric causal inference. Political Anal. 15(3):199–236.Crossref, Google Scholar
• Iacus SM, King G, Porro G (2011) Multivariate matching methods that are monotonic imbalance bounding. J. Amer. Statist. Assoc. 106(493):345–361.Crossref, Google Scholar
• Iacus SM, King G, Porro G (2012) Causal inference without balance checking: Coarsened exact matching. Political Anal. 20(1):1–24.Crossref, Google Scholar
• Imai K, King G, Stuart EA (2008) Misunderstandings between experimentalists and observationalists about causal inference. J. Roy. Statist. Soc. Ser. A 171(2):481–502.Crossref, Google Scholar
• Iyer R, Khwaja AI, Luttmer EF, Shue K (2015) Screening peers softly: Inferring the quality of small borrowers. Management Sci. 62(6):1554–1577.Link, Google Scholar
• Jiang L, Levine R, Lin C (2019) Competition and bank liquidity creation. J. Financial Quant. Anal. 54(2):513–538.Crossref, Google Scholar
• Jiménez G, Lopez JA, Saurina J (2013) How does competition affect bank risk-taking? J. Financial Stability 9(2):185–195.Crossref, Google Scholar
• Keeley MC (1990) Deposit insurance, risk, and market power in banking. Amer. Econom. Rev. 80(5):1183–1200.Google Scholar
• Kim K, Hann I-H (2019) Crowdfunding and the democratization of access to capital—An illusion? Evidence from housing prices. Inform. Systems Res. 30(1):276–290.Link, Google Scholar
• Kwast ML, Starr-McCluer M, Wolken JD (1997) Market definition and the analysis of antitrust in banking. Antitrust Bull. 42(4):973–995.Crossref, Google Scholar
• Levine R, Lin C, Xie W (2020) Geographic diversification and banks’ funding costs. Management Sci. 67(5):2657–2678.Link, Google Scholar
• Liebersohn J (2017) Does local bank competition still matter? Quasi-experimental evidence from bank mergers. Working paper, MIT, Cambridge, MA.Google Scholar
• Lin M, Viswanathan S (2016) Home bias in online investments: An empirical study of an online crowdfunding market. Management Sci. 62(5):1393–1414.Link, Google Scholar
• Lin M, Prabhala NR, Viswanathan S (2013) Judging borrowers by the company they keep: Friendship networks and information asymmetry in online peer-to-peer lending. Management Sci. 59(1):17–35.Link, Google Scholar
• Marquez R (2002) Competition, adverse selection, and information dispersion in the banking industry. Rev. Financial Stud. 15(3):901–926.Crossref, Google Scholar
• Mazzeo M, Seim K, Varela M (2018) The welfare consequences of mergers with endogenous product choice. J. Indust. Econom. 66(4):980–1016.Google Scholar
• Morse A (2015) Peer-to-peer crowdfunding: Information and the potential for disruption in consumer lending. Annual Rev. Financial Econom. 7(1):463–482.Crossref, Google Scholar
• Nguyen H-L (2019) Are credit markets still local? Evidence from bank branch closings. Amer. Econom. J. Appl. Econom. 11(1):1–32.Crossref, Google Scholar
• Pedersen C, Delgadillo L (2007) Residential mortgage default in low—and high—minority census tracts. Family Consumer Sci. Res. J. 35(4):374–391.Crossref, Google Scholar
• Petersen MA, Rajan RG (2002) Does distance still matter? The information revolution in small business lending. J. Finance 57(6):2533–2570.Crossref, Google Scholar
• Pope DG, Sydnor JR (2011) What’s in a picture? Evidence of discrimination from Prosper.com. J. Human Resources 46(1):53–92.Crossref, Google Scholar
• Rice T, Strahan PE (2010) Does credit competition affect small‐firm finance? J. Finance 65(3):861–889.Crossref, Google Scholar
• Roma P, Gal-Or E, Chen RR (2018) Reward-based crowdfunding campaigns: Informational value and access to venture capital. Inform. Systems Res. 29(3):679–697.Link, Google Scholar
• Tang H (2019) Peer-to-peer lenders vs. banks: Substitutes or complements? Rev. Financial Stud. 32(5):1900–1938.Crossref, Google Scholar
• Wei Z, Lin M (2017) Market mechanisms in online peer-to-peer lending. Management Sci. 63(12):4236–4257.Link, Google Scholar
• Zhang J, Liu P (2012) Rational herding in microloan markets. Management Sci. 58(5):892–912.Link, Google Scholar
• Zhou M, Geng D, Abhishek V, Li B (2020) When the bank comes to you: Branch network and customer omni-channel banking behavior. Inform. Systems Res. 31(1):176–197.Link, Google Scholar