Proximity to bank headquarters and branch efficiency : evidence from mortgage lending
Date
28/03/2024Metadata
Show full item recordAbstract
We use the staggered introduction of new flight routes to identify reductions in travel time between banks’ headquarters and branches to examine their effects on branch outputs and efficiency. Reductions in headquarters-branch travel time increases branch-level mortgage origination volume, and these loans exhibit higher ex-post performance. Further analyses suggest these effects are due to branch employees working harder and more efficiently in seeking new customers, and screening applications. Overall, our results suggest that geographic proximity enables bank headquarters to monitor branches more effectively and mitigate distance-related agency costs.
Citation
Lim , I , Nguyen , D D , Nguyen , L & Wilson , J O S 2024 , ' Proximity to bank headquarters and branch efficiency : evidence from mortgage lending ' , Journal of Money, Credit and Banking , vol. Early View . https://doi.org/10.1111/jmcb.13142
Publication
Journal of Money, Credit and Banking
Status
Peer reviewed
ISSN
0022-2879Type
Journal article
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