The Cross Section of Bank Value

Stefan Lewellen, Adi Sunderam and Mark Egan
Additional contact information
Stefan Lewellen: London Business School
Adi Sunderam: Harvard Business School
Mark Egan: University of Minnesota Carlson School

No 1283, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: We study the determinants of value creation within U.S. commercial banks. We begin by constructing two new measures of bank productivity: one focused on deposit-taking productivity and one focused on asset productivity. We then use these measures to evaluate the cross-section of bank value. Consistent with theories of safe-asset production, we find that variation in deposit productivity is responsible for the majority of variation in bank value. We also find evidence consistent with synergies between deposit-taking and lending activities: banks with high deposit productivity have high asset productivity, a relationship driven by the tendency of deposit-productive banks to hold illiquid loans. Our results suggest that both sides of the balance sheet contribute meaningfully to bank value creation, with the liability side playing a primary role.

Date: 2017
New Economics Papers: this item is included in nep-ban
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2017/paper_1283.pdf (application/pdf)

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:red:sed017:1283

Access Statistics for this paper

More papers in 2017 Meeting Papers from Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().