Is the traditional banking model a survivor?
Robert DeYoung and
Journal of Banking & Finance, 2018, vol. 97, issue C, 238-256
We test whether small US commercial banks that use a traditional business model are more likely to survive than nontraditional banks during both good and bad economic climates. Our concept of bank survival is derived from Stigler (1958) and includes any bank that does not fail or is not acquired. We define traditional banking by four hallmark characteristics: relationship loans, core deposit funding, revenue streams from traditional banking services, and physical bank branches. Banks that adhered more closely to this business strategy were an estimated 8 to 13 percentage points more likely to survive from 1997 to 2012 compared to other small banks using less traditional business strategies. This survival advantage approximately doubled during the financial crisis period.
Keywords: Bank business model; Financial crisis; Survivorship (search for similar items in EconPapers)
JEL-codes: G21 G01 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:97:y:2018:i:c:p:238-256
Access Statistics for this article
Journal of Banking & Finance is currently edited by Ike Mathur
More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().