Sorry, we’re closed: loan conditions when bank branches close and firms transfer to another bank

Using a dataset with information on new loans granted in Portugal, we find that when firms switch to a new bank they are able to obtain lower interest rates. This result is in line with previous findings in the literature. However, the existing literature fails to explain which of two competing explanations drive these results.… Continue reading Sorry, we’re closed: loan conditions when bank branches close and firms transfer to another bank