Abstract

We test some predictions about the effects of technological progress on geographic expansion using data on banks in U.S. multibank holding companies over 1985-98. Specifically, we test whether over time (1) parental control over affiliate banks has increased and (2) the agency costs of distance from the parent have decreased. The data suggest that banking organizations' control over affiliates has been increasing over time and that the agency costs of distance have decreased somewhat over time. The findings are consistent with the hypothesis that technological progress has facilitated the geographic expansion of the banking industry.

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Additional Information

ISSN
1538-4616
Print ISSN
0022-2879
Pages
pp. 1483-1513
Launched on MUSE
2006-10-09
Open Access
No
Archive Status
Archived 2007
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