Abstract

http://ssrn.com/abstract=1389155
 


 



The Impact of Organizational Structure and Lending Technology on Banking Competition


Hans Degryse


KU Leuven, Department Accounting, Finance and Insurance; Centre for Economic Policy Research (CEPR)

Luc Laeven


European Central Bank (ECB); Centre for Economic Policy Research (CEPR)

Steven Ongena


University of Zurich - Department of Banking and Finance; Swiss Finance Institute

April 2009

Review of Finance, Vol. 13, Issue 2, pp. 225-259, 2009

Abstract:     
We investigate how bank organization shapes banking competition. We show that a bank's geographical lending reach and loan pricing strategy is determined by its own and its rivals’ organizational structure. We estimate the impact of organization on the geographical reach and loan pricing of a large bank. We find that the reach of the bank is smaller when rival banks are large and hierarchically organized, have superior communication technology, have a narrower span of organization, and are closer to a decision unit with lending authority. Rival banks’ size and the number of layers to a decision unit soften spatial pricing.

Keywords: G21, L11, L14


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Date posted: April 21, 2009  

Suggested Citation

Degryse, Hans and Laeven, Luc and Ongena, Steven, The Impact of Organizational Structure and Lending Technology on Banking Competition (April 2009). Review of Finance, Vol. 13, Issue 2, pp. 225-259, 2009. Available at SSRN: http://ssrn.com/abstract=1389155 or http://dx.doi.org/rfn029

Contact Information

Hans Degryse (Contact Author)
KU Leuven, Department Accounting, Finance and Insurance ( email )
Naamsestraat 69
Leuven, B-3000
Belgium
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Luc A. Laeven
European Central Bank (ECB) ( email )
Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Steven R. G. Ongena
University of Zurich - Department of Banking and Finance ( email )
Schönberggasse 1
Zürich, 8001
Switzerland
Swiss Finance Institute ( email )
Quartier UNIL-Dorigny, Bâtiment Extranef, # 211
40, Bd du Pont-d'Arve
CH-1015 Lausanne, CH-6900
Switzerland

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