Access to financial capital is vital for the sustainability of the local business sector. Recent
research on the restructuring of the financial industry from local owned banks to interstate conglomerates
has raised questions about the impact on local economies, especially in rural areas. We examine the im-
pact of bank ownership concentration on business formations, continuations, and deaths in metropolitan,
micropolitan, and rural U.S. counties. Using limited-access Census data, we find that local bank
concentration is positively related to business births and deaths, or churn, in rural counties, but the opposite
effects occur in metropolitan areas.
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