Transformation of corporate scope in U.S. banks: patterns and performance implications

Nicola Cetorelli, Michael Jacobides and Samuel Stern

No 813, Staff Reports from Federal Reserve Bank of New York

Abstract: Using a novel database containing the time-series details of the organizational structure of individual bank holding companies, this paper presents the first population-wide study of the transformation in business scope of U.S. banks. Expanding scope has a negative impact on performance on average. However, we find that firms whose expansion keeps them closer to the prevailing ?modal bank? are better off compared with those pursuing generic diversification. Moreover, we find that early expanders into particular activities benefit more, whereas late adopters, rather than benefitting by ?fitting the norm,? lose out.

Keywords: performance; diversification; business scope (search for similar items in EconPapers)
JEL-codes: G21 L22 L25 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2017-05-01
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (11)

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