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Proximity to Bank Headquarters and Branch Efficiency: Evidence from Mortgage Lending

Lim, Ivan; Nguyen, Louis Duc Duy; Nguyen, Linh; Wilson, John O.S.

Authors

Linh Nguyen

John O.S. Wilson



Abstract

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 imply that geographic proximity enables bank
headquarters to monitor branches more effectively and mitigate distance-related agency costs.

Citation

Lim, I., Nguyen, L. D. D., Nguyen, L., & Wilson, J. O. (in press). Proximity to Bank Headquarters and Branch Efficiency: Evidence from Mortgage Lending. Journal of Money, Credit and Banking,

Journal Article Type Article
Acceptance Date Jun 6, 2023
Deposit Date Aug 15, 2023
Journal Journal of Money, Credit and Banking
Print ISSN 0022-2879
Electronic ISSN 1538-4616
Publisher Wiley
Peer Reviewed Peer Reviewed
Public URL https://durham-repository.worktribe.com/output/1717782
Publisher URL https://onlinelibrary.wiley.com/journal/15384616

This file is under embargo due to copyright reasons.






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