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The Impact of Organizational Structure and Lending Technology on Banking Competition

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Listed:
  • Degryse, H.A.

    (Tilburg University, TILEC)

  • Laeven, L.

    (Tilburg University, TILEC)

  • Ongena, S.

    (Tilburg University, TILEC)

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. Copyright 2009, Oxford University Press.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Degryse, H.A. & Laeven, L. & Ongena, S., 2007. "The Impact of Organizational Structure and Lending Technology on Banking Competition," Discussion Paper 2007-019, Tilburg University, Tilburg Law and Economic Center.
    • Handle: RePEc:tiu:tiutil:d0e3493d-1229-4ab4-841a-4a9093b04fd9
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    References listed on IDEAS

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    More about this item

    Keywords

    banking sector; competition; hierarchies; authority; technology;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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