Natural disasters and economic growth: The role of banking market structure

Andi Duqi; Danny McGowan; Enrico Onali; Giuseppe Torluccio

doi:10.1016/j.jcorpfin.2021.102101

Natural disasters and economic growth: The role of banking market structure

Andi Duqi^*
, Danny McGowan
, Enrico Onali
, Giuseppe Torluccio

^*Corresponding author for this work

Research output: Contribution to journal › Article (Academic Journal) › peer-review

38 Citations (Scopus)

Abstract

Following a natural disaster, the rate of economic growth recovers faster in less competitive banking markets. A 10% reduction in competition increases the rate of economic growth by 0.3%. In less competitive markets, banks respond to a disaster by increasing the supply of real estate credit by refinancing mortgage loans, but do not lend more to businesses or consumers. Instead, government agencies provide disaster loans to affected businesses and households. Smaller, profitable and well-capitalized institutions that rely more on traditional retail banking originate most mortgage credit.

Original language	English
Article number	102101
Number of pages	21
Journal	Journal of Corporate Finance
Volume	71
Early online date	21 Oct 2021
DOIs	https://doi.org/10.1016/j.jcorpfin.2021.102101
Publication status	Published - 1 Dec 2021

Bibliographical note

Publisher Copyright:
© 2021 The Authors.

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Research Groups and Themes

AF Banking

Keywords

Banks
Disasters
Economic growth

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title = "Natural disasters and economic growth: The role of banking market structure",

abstract = "Following a natural disaster, the rate of economic growth recovers faster in less competitive banking markets. A 10\% reduction in competition increases the rate of economic growth by 0.3\%. In less competitive markets, banks respond to a disaster by increasing the supply of real estate credit by refinancing mortgage loans, but do not lend more to businesses or consumers. Instead, government agencies provide disaster loans to affected businesses and households. Smaller, profitable and well-capitalized institutions that rely more on traditional retail banking originate most mortgage credit.",

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T2 - The role of banking market structure

AU - Duqi, Andi

AU - McGowan, Danny

AU - Onali, Enrico

AU - Torluccio, Giuseppe

PY - 2021/12/1

Y1 - 2021/12/1

N2 - Following a natural disaster, the rate of economic growth recovers faster in less competitive banking markets. A 10% reduction in competition increases the rate of economic growth by 0.3%. In less competitive markets, banks respond to a disaster by increasing the supply of real estate credit by refinancing mortgage loans, but do not lend more to businesses or consumers. Instead, government agencies provide disaster loans to affected businesses and households. Smaller, profitable and well-capitalized institutions that rely more on traditional retail banking originate most mortgage credit.

AB - Following a natural disaster, the rate of economic growth recovers faster in less competitive banking markets. A 10% reduction in competition increases the rate of economic growth by 0.3%. In less competitive markets, banks respond to a disaster by increasing the supply of real estate credit by refinancing mortgage loans, but do not lend more to businesses or consumers. Instead, government agencies provide disaster loans to affected businesses and households. Smaller, profitable and well-capitalized institutions that rely more on traditional retail banking originate most mortgage credit.

KW - Banks

KW - Disasters

KW - Economic growth

U2 - 10.1016/j.jcorpfin.2021.102101

DO - 10.1016/j.jcorpfin.2021.102101

M3 - Article (Academic Journal)

AN - SCOPUS:85118559622

SN - 0929-1199

VL - 71

JO - Journal of Corporate Finance

JF - Journal of Corporate Finance

M1 - 102101

ER -

Natural disasters and economic growth: The role of banking market structure

Abstract

Bibliographical note

UN SDGs

Research Groups and Themes

Keywords

Access to Document

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