Keywords: Banks, efficiency, mergers, productivity, technological progress
Abstract: We test some predictions about the effects of technological progress
on geographic expansion using data on banks in U.S. multibank holding
companies over 1985-1998. Specifically, we test whether over time (a)
parental control over affiliate banks has increased, and (b) the
agency costs associated with distance from the parent have decreased.
The data suggest that banking organizations exercise significant
control over affiliates that has been increasing over time, and that
the agency costs associated with distance have decreased somewhat over
time. The findings are consistent with the hypothesis that
technological progress has facilitated the geographic expansion of the
Full paper (309 KB PDF)
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Last update: July 2, 2002