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Bank branches expansion, efficiency and local economic growth

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  • Cristina Bernini
  • Paola Brighi

Abstract

This study investigates the effects of branch network expansion and geographical strategies on the cost efficiency of Italian cooperative banks between 2006 and 2013. Results indicate that, except for banks with a more diversified product offering, expansion has a negative impact on efficiency, which is exacerbated by increased distance between the headquarters and branches. Any positive effect due to a larger bank size is neutralized by the branch expansion. Efficient local banks and a larger credit availability boost the local economy, while a bank structural change by a branch expansion generates a negative effect in terms of local economic development.

Suggested Citation

  • Cristina Bernini & Paola Brighi, 2018. "Bank branches expansion, efficiency and local economic growth," Regional Studies, Taylor & Francis Journals, vol. 52(10), pages 1332-1345, October.
    • Handle: RePEc:taf:regstd:v:52:y:2018:i:10:p:1332-1345
    DOI: 10.1080/00343404.2017.1380304
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    Cited by:

    1. Tanni Roy & Md. Emran Hossain & Md. Jahid Ebn Jalal & Jiban Krishna Saha & Eshrat Sharmin & Md. Akhtaruzzaman Khan, 2021. "Effects of credit on national and agricultural GDP, and poverty: a developing country perspective," SN Business & Economics, Springer, vol. 1(10), pages 1-20, October.
    2. A. V. Mishura & S. D. Ageeva, 2020. "Providing Banking Branches in Russian Regions: Assessment of the Role of Distance and Other Factors," Regional Research of Russia, Springer, vol. 10(4), pages 506-512, October.
    3. Barra, Cristian & Ruggiero, Nazzareno, 2021. "Do microeconomic and macroeconomic factors influence Italian bank credit risk in different local markets? Evidence from cooperative and non-cooperative banks," Journal of Economics and Business, Elsevier, vol. 114(C).
    4. Christos Floros, 2020. "Banking Development and Economy in Greece: Evidence from Regional Data," JRFM, MDPI, vol. 13(10), pages 1-13, October.
    5. Kai Tang & Qianbo Chen & Weijie Tan & Yi Jun Wu Feng, 2022. "The Impact of Financial Deepening on Carbon Reductions in China: Evidence from City- and Enterprise-Level Data," IJERPH, MDPI, vol. 19(18), pages 1-15, September.
    6. Pu, Zhengning & Yang, Mingyan, 2022. "The impact of city commercial banks’ expansion on China’s regional energy efficiency," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 10-28.
    7. Bruno de Menna, 2021. "Monetary Policy, Credit Risk, and Profitability: The Influence of Relationship Lending on Cooperative Banks' Performance," Working Papers hal-03138738, HAL.
    8. Süleyman KALE & Mehmet Hasan EKEN, 2022. "Bank Efficiency and Economic Growth in the OECD Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 46-66, October.
    9. Kumar, Vijay & Thrikawala, Sujani & Acharya, Sanjeev, 2022. "Financial inclusion and bank profitability: Evidence from a developed market," Global Finance Journal, Elsevier, vol. 53(C).
    10. Wang, Wei & Huang, Jun & Wang, Haibo & Alidaee, Bahram, 2022. "Internal and external analysis of community banks' performance," International Review of Financial Analysis, Elsevier, vol. 84(C).
    11. Antonio Fabio Forgione & Issam Laguir & Raffaele Staglianò, 2020. "Effect of corporate social responsibility scores on bank efficiency: The moderating role of institutional context," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(5), pages 2094-2106, September.
    12. Spokeviciute, Laima & Keasey, Kevin & Vallascas, Francesco, 2019. "Do financial crises cleanse the banking industry? Evidence from US commercial bank exits," Journal of Banking & Finance, Elsevier, vol. 99(C), pages 222-236.
    13. Carmelo Algeri & Luc Anselin & Antonio Fabio Forgione & Carlo Migliardo, 2022. "Spatial dependence in the technical efficiency of local banks," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 685-716, June.
    14. Iulia Cristina Iuga & Larisa-Loredana Dragolea, 2021. "Well-Being Impact on Banking Systems," JRFM, MDPI, vol. 14(3), pages 1-22, March.

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