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A recent study by Kenneth Ng (1988) challenges the view that free banking laws lowered barriers to entry. The authors' study examines bank entry and capital formation in free and nonfree banking states during the free banking period. A competitive model is developed and used to test if barriers were lowered in free banking states. The evidence indicates that entry significantly increased after the enactment of the free banking laws and that entry policy in nonfree banking states appeared to have been 'liberalized' when the free banking laws were enacted in other states.


This is the peer reviewed version of the following article: Economopoulos, A. J. and O'Neill, H. M. (1995), Bank Entry During the Antebellum Period. J. Money Credit Bank., 27, No. 4 Part 1: 1071–1085., which has been published in final form at doi: 10.2307/2077790

Published by Ohio State University Press.