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The Impact of Bank Expansion on Self-Employed Business Owners: Evidence from US States

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Abstract

We use state-level bank branch deregulations to study the impact of changes in credit on entrepreneurship at the individual-owner level. We classify self-employed individuals into incorporated and unincorporated business owners. Exploiting the variation in the staggered timing of banking deregulations, we find that branching reforms affected the entry and exit rates of the incorporated self-employed. Further, the branching reforms encouraged unincorporated businesses to incorporate. Finally, the effects of reforms are different across groups based on gender, race, and age. We find stronger effects on incorporated business creation among minorities, and higher exit rates among the young and minorities.

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  • Anindo Sarker & Bulent Unel, 2017. "The Impact of Bank Expansion on Self-Employed Business Owners: Evidence from US States," Departmental Working Papers 2017-06, Department of Economics, Louisiana State University.
    • Handle: RePEc:lsu:lsuwpp:2017-06
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    Cited by:

    1. Bulent Unel, 2018. "Effects of Immigration on Native Entrepreneurship in the U.S," Departmental Working Papers 2018-01, Department of Economics, Louisiana State University.

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