Determinants of Bank Growth Choice

Document Type

Article

Publication Date

5-1-2000

Department

Finance, Real Estate, and Business Law

Abstract

We study the determinants of bank growth in a two-stage logistic regression model. We first compare banks that branch, Bank Acquire, or Product Expand with banks that do not grow externally. Banks that are federally chartered, in states with higher income growth, and with higher labor prices are less likely to grow externally. Larger banks are more likely to grow externally. In the second stage, we study determinants of growth activity for banks that expand products, branch, or acquire other banks. Depending on the time period, bank structure, regulatory environment, performance, and balance sheet characteristics determine bank growth choices. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G21; G34.

Publication Title

Journal of Banking & Finance

Volume

24

Issue

5

First Page

709

Last Page

734

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