Local appeal and competition in multiple geographic markets: evidence from California retail banking between 1900 and 1990

This article assesses the effect of identity-related local appeal when firms compete in multiple geographic markets, and investigates how local appeal and multimarket advantages collectively determine the competitive strength of an organization. Compared with numerous studies that identified the benefits for being a chain system, recent researches on organizational identity highlight the social sanctions and discount when an organizational form does not fully conform to the norms and expectations at a given market. Empirical evidence from California retail banks in the 20th century demonstrates that organizational identity can be an important source of competitive strength even when considerable scale and scope advantages exist. However, when customers are not locally oriented, an organization’s identity-based appeal becomes less meaningful. Such a finding suggests the scope condition for organizational identity research.