Finance and Economics Discussion Series (FEDS)
January 2008
Recent Trends in the Number and Size of Bank Branches: An Examination of Likely Determinants
Timothy H. Hannan and Gerald A. Hanweck
Abstract:
In this paper, we examine the role of market characteristics in explaining the much discussed phenomenon of growth in the number of banking institution branches over time, and the much less discussed phenomenon of decline in the size of the average branch. We note first that substitution of bank branches in the US for thrift branches accounts for much of the sharp rise observed for bank branches over time. Using a panel data set that consists of over 2,000 markets observed from 1988 to 2004, we report a number of findings regarding the market characteristics that are associated with the number of branches (of both commercial banks and savings associations) in a market and the average employment size of those branches.
Full Paper (Screen Reader Version)Keywords: Banks, Branching, Location
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