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Regional differences in bank efficiency and technology

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Abstract

Regional differences in production technologies and the effect of regulatory stringency — which differs across states — are analyzed for a sample of large U.S. commercial banks. Differences in both dimensions of production are found. Banks located in the midwestern states are found to be more adversely affected by regulation, however, to have a technology which enables them to be more resilient to regulatory induced distortions, i.e., they would produce more efficiently under comparable regulatory conditions. The policy implications of the results are discussed.

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Authors and Affiliations

  1. Federal Reserve Bank of Chicago, 230 South Lasalle Street, 60604, Chicago, IL, USA

    Douglas D. Evanoff & Philip R. Israilevich

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  1. Douglas D. Evanoff
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  2. Philip R. Israilevich
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Excellent data and research assistance by Betsy Dale and Peter Schneider is acknowledged. The views expressed are solely those of the authors and may not be shared by others including the Federal Reserve Bank of Chicago or the Federal Reserve Board of Governors.

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Evanoff, D.D., Israilevich, P.R. Regional differences in bank efficiency and technology. Ann Reg Sci 25, 41–54 (1991). https://doi.org/10.1007/BF01581896

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  • DOI: https://doi.org/10.1007/BF01581896

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