What drives banks' geographic expansion? : the role of locally non-diversifiable risk / Reint E. Gropp, Felix Noth, Ulrich Schüwer
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What drives banks` geographic expansion?
Discovery
1672456479
URN
urn:nbn:de:gbv:3:2-111331
DOI
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Publication history
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, 2019
Content
1 Online-Ressource (III, 49, XV Seiten, 1,6 MB) : Illustrationen
Edition
Second draft: August 28, 2019
Language
eng
Comment
Abstract
We show that banks that are facing relatively high locally non-diversifiable risks in their home region expand more across states than banks that do not face such risks following branching deregulation in the United States during the 1990s and 2000s. Further, our evidence shows that these banks take into account the local risks in potential target regions: they expand more into counties where risks are relatively high and positively correlated with risks in their home region. This suggests that these banks do not only diversify but also build on their expertise in local risks when they expand into new regions.
Series
IWH-Diskussionspapiere ; 2019, no. 6 (March 2019) [rev.] ppn:837399270