Counterfactual analysis of bank mergers

Pedro P. Barros, Diana Bonfim, Moshe Kim, Nuno C. Martins

Research output: Contribution to journalArticlepeer-review


We introduce a counterfactual analysis of banks mergers, combining the pre-merger equilibrium setting with post-merger environmental characteristics, while accounting for endogenously propagated changes in market structure. Using this procedure we are able to estimate the effects on loan flows and interest rates that would have been observed if the pre-merger equilibrium was not altered. Results are obtained for firms, households, and banks inside and outside the merging circles separately.We find that mergers increased firms’ access to credit, but had an opposite effect on households and led to a widespread decrease in interest rates.

Original languageEnglish
Pages (from-to)361-391
Number of pages31
JournalEmpirical Economics
Issue number1
StatePublished - 29 Nov 2012

Bibliographical note

Publisher Copyright:
© Springer-Verlag Berlin Heidelberg 2012.


  • Banks
  • Competition
  • Counterfactual
  • Mergers

ASJC Scopus subject areas

  • Statistics and Probability
  • Mathematics (miscellaneous)
  • Social Sciences (miscellaneous)
  • Economics and Econometrics


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