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Informational loss and competitive effects of a branch closure

We aim at studying the effects of banks' branch closures on local competition and credit access. Since the recent crisis, branch closures became widespread as a response to decreasing margins and technological improvement in the treatment of borrowers' information. While the use of information technologies could increase the efficiency of the financial intermediation and improve credit supply to previously isolated areas, decreasing bank branch density gives also rise to serious concerns from local communities and some regulatory. An increased distance between bank branches and firms could lead to the loss of soft information for borrowers from a closed branch and make credit access more difficult and costly for all local firms.