What Drives Banks' Geographic Expansion? The Role of Locally Non-Diversifiable Risk
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Datum
2019-03-06
Autor
Gropp, Reint E.
Noth, Felix
Schüwer, Ulrich
SAFE No.
246
Metadata
Zur Langanzeige
Zusammenfassung
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.
Forschungsbereich
Financial Institutions
Schlagworte
banking, geographic expansion, deregulation, locally non-diversifiable risk, catastrophic risk
JEL-Klassifizierung
G21, G28
Thema
Corporate Finance
Saving and Borrowing
Stability and Regulation
Saving and Borrowing
Stability and Regulation
Beziehungen
1
Publikationstyp
Working Paper
Link zur Publikation
Collections
- LIF-SAFE Working Papers [334]