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dc.contributor.authorCornaggia, Jess
dc.contributor.authorMao, Yifei
dc.contributor.authorTian, Xuan
dc.contributor.authorWolfe, Brian
dc.description.abstractWe exploit the deregulation of interstate bank branching laws to test whether banking competition affects innovation. We find robust evidence that banking competition reduces state-level innovation by public corporations headquartered within deregulating states. Innovation increases among private firms that are dependent on external finance and that have limited access to credit from local banks. We argue that banking competition enables small, innovative firms to secure financing instead of being acquired by public corporations. Therefore, banking competition reduces the supply of innovative targets, which reduces the portion of state-level innovation attributable to public corporations. Overall, these results shed light on the real effects of banking competition and the determinants of innovation.
dc.rightsRequired Publisher Statement: © Journal of Financial Economics. Final version published as: Cornaggia, J., Mao, Y., Tian, X., & Wolfe, B. (2015). Does banking competition affect innovation? Journal of Financial Economics, 115(1), 189-209. doi:10.1016/j.jfineco.2014.09.001Reprinted with permission. All rights reserved.
dc.subjectbanking competition
dc.subjectaccess to finance
dc.subjectmergers and acquisitions
dc.titleDoes Banking Competition Affect Innovation?
dc.description.legacydownloadsMao1_Does_Banking_EMBARGO48.pdf: 777 downloads, before Aug. 1, 2020.
local.authorAffiliationCornaggia, Jess: Georgetown University
local.authorAffiliationMao, Yifei: Cornell University School of Hotel Administration
local.authorAffiliationTian, Xuan: Indiana University
local.authorAffiliationWolfe, Brian: Indiana University

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