The Cross Section of Bank Value

67 Pages Posted: 23 Mar 2017 Last revised: 20 Oct 2018

See all articles by Mark Egan

Mark Egan

Harvard Business School; National Bureau of Economic Research (NBER)

Stefan Lewellen

Pennsylvania State University; London Business School

Aditya Sunderam

Harvard University

Multiple version iconThere are 2 versions of this paper

Date Written: August 19, 2018


We study the determinants of value creation in the cross section of U.S. commercial banks. We develop novel measures of individual bank's productivities at collecting deposits and making loans. We relate these measures to bank market values and find that variation in deposit productivity explains the majority of cross-sectional variation in bank value. We show that variation in productivity is driven by differences across banks in technology, customer demographics, and market power. We also find evidence of synergies between deposit-taking and lending. Our findings suggest that there is significant heterogeneity in banks' abilities to capture value by manufacturing safe assets.

Keywords: Bank value, safe assets, screening and monitoring, bank synergies, deposit productivity, asset productivity

JEL Classification: G21, G32, E44, D22, D24, L21, L22, L23, L25

Suggested Citation

Egan, Mark and Lewellen, Stefan and Sunderam, Aditya, The Cross Section of Bank Value (August 19, 2018). Available at SSRN: or

Mark Egan

Harvard Business School ( email )

Soldiers Field Road
Baker Library 365
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United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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Stefan Lewellen (Contact Author)

Pennsylvania State University ( email )

360 Business Building
University Park, PA 16802
United States

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Aditya Sunderam

Harvard University ( email )

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