The impact of organizational structure and lending technology on banking competition

H.A. Degryse, L. Laeven, S. Ongena

Research output: Contribution to journalArticleScientificpeer-review

43 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)225-259
JournalReview of Finance
Volume13
Issue number2
Publication statusPublished - 2009

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