Move a little closer? Information sharing and the spatial clustering of bank branches

Shusen Qi, Ralph De Haas, Steven Ongena, Stefan Straetmans and Tamas Vadasz

Review of Finance, 2024, vol. 28, issue 6, 1881-1918

Abstract: We present a model of credit market competition to derive key hypotheses about how information sharing between banks influences the spatial clustering of their branches. We then test these hypotheses using data on 56,555 branches owned by 614 banks across 19 countries. We find that information sharing incentivizes banks to establish branches in localities that are new to them but that are already served by other banks. The resultant branch clustering is associated with reduced spatial credit rationing, as information sharing enables firms to access credit from more distant banks. These findings underscore how information sharing makes it more important for banks to move closer to each other rather than closer to their borrowers.

Keywords: information sharing; branch clustering; spatial bank competition (search for similar items in EconPapers)
JEL-codes: D43 G21 G28 L13 R51 (search for similar items in EconPapers)
Date: 2024
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Related works:
Working Paper: Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches (2023)
Working Paper: Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches (2021)
Working Paper: Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches (2019)
Working Paper: Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches (2018)
Working Paper: Move a Little Closer? Information Sharing and the Spatial Clustering of Bank Branches (2018)
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