Finance and Efficiency: Do Bank Branching Regulations Matter?
Abstract
We document that the deregulation of bank branching restrictions in the United States triggered a reallocation across sectors, with end effects on state-level volatility. The change cannot be explained simply by shifts in sector-level returns and volatility. A reallocation effect is at play, which we study in the context of mean-variance portfolio theory applied to sectoral returns. We find the reallocation is particularly strong in sectors characterized by young, small and external finance dependent firms, and for states that have a larger share of such sectors. The findings suggest that improving bank access to branching affects the sectoral specialization of output, in a manner that depends on the variance-covariance properties of sectoral returns, rather than on their average only.
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Liberalizing intrastate branching and interstate banking restrictions tended to accelerate growth without boosting volatility.
“Acharya, Imbs, and Sturgess (2011) discover that liberalizing intrastate branching and interstate banking restrictions tended to accelerate growth without boosting volatility.”
From Finance, Growth, and Inequality (2021) · cites this paper as Acharya, Imbs, and Sturgess (2011)
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Finance, Growth, and Inequality
Levine, R. (2021) · IMF Working Papers · doi:10.5089/9781513583365.001 · Cited by 62 · see citing works
- Authors
- Acharya, V. V., Imbs, J., & Sturgess, J.
- Affiliations
- Centre for Economic Policy Research (GB)
- Centre d'Économie de la Sorbonne (FR)
- Georgetown University (US)
- Venue
- Review of Finance
- Publisher
- Oxford University Press (OUP)
- Published
- 2010-05-12
- Volume
- 15
- Issue
- 1
- Pages
- 135-172
- ISSN
- 1382-6662 (ISSN-L)
- 1573-692X
- 1572-3097
- OpenAlex
- W3123738036
- Cited by
- 58
- References
- 0
- Citations by year
- 2026: 3 · 2024: 4 · 2023: 4 · 2022: 2 · 2021: 3 · 2020: 4 · 2019: 5 · 2018: 4 · 2017: 4 · 2016: 3 · 2015: 4 · 2014: 4 · 2013: 3 · 2012: 4
- FWCI
- 6.69
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- European Finance Review (publishedVersion)
- HAL (submittedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Finance › Banking stability, regulation, efficiency
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Monetary Policy and Economic Impact
- Social Sciences › Economics, Econometrics and Finance › Finance › Financial Risk and Volatility Modeling
- Keywords
- banking deregulation, sectoral reallocation, mean-variance portfolio theory, sectoral stock returns, external financing dependence, small business, banking access, financial efficiency, industrial specialization
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