What happens to firm performance and financing when bank branches close?

Abstract

The thesis study how bank branch closures affect firm performance and financing, with a special focus on rural areas in Norway and the savings bank branches role in these areas. To analyze the topic, we use a Difference-in-Difference regression model on a sample consisting of Norwegian independent firms operating between 2001 and 2015. We find that firm financing and performance is in some cases affected negatively by bank branch closures, whereas the results are even more apparent in rural areas. Savings bank branches seem to be more critical to startups in terms of providing capital.