Skip to main content
Event_

Bank Entrepreneurs

Jul 19, 2019 11:00 am - 12:00 pm AEST


Abstract
This paper provides the first analysis of entrepreneurs chartering deposit-insured banks in the U.S. By merging hand-collected biographical data on entrepreneurs of De Novo banks with detailed call reports, we directly connect entrepreneurial characteristics to corporate policy and firm outcomes. First, we find strong evidence that bank entrepreneurs are driven by local opportunities, bring significant banking and managerial experience, have the networks necessary to raise local funding, and extend past lending practices. Second, to better identify the value of each individual in our study, we confirm that a new bank’s lending policies are strongly predicted by the prior employment experiences of the bank’s entrepreneurs. Exploiting these relationships, we illustrate the entrepreneur has a causal effect on loan and bank performance, as well as the likelihood of failure.