EconPapers    
Economics at your fingertips  
 

Bank branch location and stability during distress

Jill M. Hendrickson, Mark Nichols and Daniel R. Fairchild

Journal of Financial Economic Policy, 2014, vol. 6, issue 2, 133-151

Abstract: Purpose - – The purpose of this paper is to examine the impact of bank branch location on the likelihood of bank failure during the most recent financial crisis. Design/methodology/approach - – This paper estimates the probit regression to identify the causes of bank failures and attempts to determine the role of branch location in bank performance. Findings - – Using data from failed and surviving banks in Georgia and Florida, this paper finds that diversifying the balance sheet and operating in more competitive markets reduced failure rates, but branching intensity, measured by number of branches and distance of branches from the home office did not significantly reduce the probability of failure. This suggests that, at least in today ' - s market, it is not important to bank stability to have a branching network a significant distance from the home office. Originality/value - – This paper carefully considers the role of branch location in the likelihood of bank failure during financial distress. As such, it contributes to the historical policy debate regarding regulation prohibiting or minimizing banks ' - ability to branch. It also contributes to our understanding of how banks structure their branching networks in the contemporary banking environment.

Keywords: Financial crisis; Branch banking; Bank failures; E44; G21; G28 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.emeraldinsight.com/10.1108/JFEP-07-2013 ... RePEc&WT.mc_id=RePEc (text/html)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:jfeppp:v:6:y:2014:i:2:p:133-151

Ordering information: This journal article can be ordered from
Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK
http://www.emeraldinsight.com/jfep.htm

Access Statistics for this article

Journal of Financial Economic Policy is currently edited by James Barth and John Jahera

More articles in Journal of Financial Economic Policy from Emerald Group Publishing
Bibliographic data for series maintained by Virginia Chapman ().

 
Page updated 2020-06-29
Handle: RePEc:eme:jfeppp:v:6:y:2014:i:2:p:133-151