Spatial patterns in the location decisions of US credit unions
Building on central place theory, we offer a series of simple location models for US credit unions. Credit unions are historically viewed as a community-based strategy designed to fill voids in spatial financial markets. Unlike banks and more traditional retail financial institutions, our results show that credit unions operate in areas with a low concentration of retail banks. This suggests that credit unions do not follow the “herd” mentality that dominates traditional retail banking institutions. Instead they cluster around common bonds of association. That is credit unions are fundamentally capturing a different market than traditional banks and do not behave in a pro-competitive manner with banks. In the spirit of Bitter et al. (J Geogr Syst 9:7–27, 2007 ), we compare the overall performance of geographically weighted regression with a set of both spatial and non-spatial estimators. We find that the spatial estimators generally performed better than the aspatial estimators, and there is significant spatial heterogeneity in some of the determinants of credit union concentrations. Results on individual variables of interest tend to be stable across the different estimators lending confidence to our hypothesis that credit unions serve niche markets. Copyright Springer-Verlag 2012
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 49 (2012)
Issue (Month): 2 (October)
|Contact details of provider:|| Web page: http://www.springer.com|
|Order Information:||Web: http://link.springer.com/journal/168|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paulo Guimarães & Octávio Figueirdo & Douglas Woodward, 2003.
"A Tractable Approach to the Firm Location Decision Problem,"
The Review of Economics and Statistics,
MIT Press, vol. 85(1), pages 201-204, February.
- Paulo Guimaraes & Octavio Figueiredo & Douglas Woodward, 2000. "A tractable approach to the firm location decision problem," NIMA Working Papers 2, Núcleo de Investigação em Microeconomia Aplicada (NIMA), Universidade do Minho.
- Claudia M. Buch, 2005. "Distance and International Banking," Review of International Economics, Wiley Blackwell, vol. 13(4), pages 787-804, 09.
- Buch, Claudia M., 2001. "Distance and International Banking," Kiel Working Papers 1043, Kiel Institute for the World Economy (IfW).
- Robert Pahre, 2009. "Introduction," International Interactions, Taylor & Francis Journals, vol. 35(4), pages 418-419, November.
- A S Fotheringham & M E Charlton & C Brunsdon, 1998. "Geographically weighted regression: a natural evolution of the expansion method for spatial data analysis," Environment and Planning A, Pion Ltd, London, vol. 30(11), pages 1905-1927, November.
- Amemiya, Takeshi, 1973. "Regression Analysis when the Dependent Variable is Truncated Normal," Econometrica, Econometric Society, vol. 41(6), pages 997-1016, November.
- A S Fotheringham & M E Charlton & C Brunsdon, 1998. "Geographically Weighted Regression: A Natural Evolution of the Expansion Method for Spatial Data Analysis," Environment and Planning A, , vol. 30(11), pages 1905-1927, November.
- Robert Feinberg, 2008. "Explaining the Credit Union Entry Decision, and Implications for Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(1), pages 81-91, August.
- Raghuram G. Rajan, 1994. "Why Bank Credit Policies Fluctuate: A Theory and Some Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 399-441.
- Persons, John C & Warther, Vincent A, 1997. "Boom and Bust Patterns in the Adoption of Financial Innovations," Review of Financial Studies, Society for Financial Studies, vol. 10(4), pages 939-967.
- Gehrig, Thomas, 1998. "Cities and the Geography of Financial Centres," CEPR Discussion Papers 1894, C.E.P.R. Discussion Papers.
- Nicholas Bardsley & Robin Cubitt & Graham Loomes & Peter Moffatt & Chris Starmer & Robert Sugden, 2009. "Introduction," Introductory Chapters,in: Experimental Economics: Rethinking the Rules Princeton University Press.
- Eaton, B Curtis & Lipsey, Richard G, 1982. "An Economic Theory of Central Places," Economic Journal, Royal Economic Society, vol. 92(365), pages 56-72, March.
- Yamori, Nobuyoshi, 1998. "A note on the location choice of multinational banks: The case of Japanese financial institutions," Journal of Banking & Finance, Elsevier, vol. 22(1), pages 109-120, January.
- Cerutti, Eugenio & Dell'Ariccia, Giovanni & Martinez Peria, Maria Soledad, 2007. "How banks go abroad: Branches or subsidiaries?," Journal of Banking & Finance, Elsevier, vol. 31(6), pages 1669-1692, June.
- Cerutti, Eugenio & Dell'Ariccia, Giovanni & Martinez Peria, Maria Soledad, 2005. "How banks go abroad : branches or subsidiaries ?," Policy Research Working Paper Series 3753, The World Bank.
- Devenow, Andrea & Welch, Ivo, 1996. "Rational herding in financial economics," European Economic Review, Elsevier, vol. 40(3-5), pages 603-615, April.
- Gordon F. Mulligan, 1984. "Agglomeration and Central Place Theory: A Review of the Literature," International Regional Science Review, , vol. 9(1), pages 1-42, September.
- Mulligan, Gordon F., 1980. "The effects of multiplier shifts in a hierarchical city-size model," Regional Science and Urban Economics, Elsevier, vol. 10(1), pages 77-90, March.
- Andrew M. Cohen & Michael J. Mazzeo, 2007. "Market Structure and Competition among Retail Depository Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 60-74, February.
- Christopher Bitter & Gordon Mulligan & Sandy Dall’erba, 2007. "Incorporating spatial variation in housing attribute prices: a comparison of geographically weighted regression and the spatial expansion method," Journal of Geographical Systems, Springer, vol. 9(1), pages 7-27, April.
- Bitter, Chris & Mulligan, Gordon & Dall'erba, Sandy, 2006. "Incorporating spatial variation in housing attribute prices: A comparison of geographically weighted regression and the spatial expansion method," MPRA Paper 1379, University Library of Munich, Germany.
- Luc Anselin, 2010. "Thirty years of spatial econometrics," Papers in Regional Science, Wiley Blackwell, vol. 89(1), pages 3-25, 03.
- Goddard, John A. & McKillop, Donal G. & Wilson, John O. S., 2002. "The growth of US credit unions," Journal of Banking & Finance, Elsevier, vol. 26(12), pages 2327-2356.
- Steven Pilloff, 1999. "Does the Presence of Big Banks Influence Competition in Local Markets?," Journal of Financial Services Research, Springer;Western Finance Association, vol. 15(3), pages 159-177, May.
- Robert Feinberg, 2002. "Credit Unions: Fringe Suppliers or Cournot Competitors?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(2), pages 105-113, March.
- Sang Choi & Daekeun Park & Adrian Tschoegl, 1996. "Banks and the world’s major banking centers, 1990," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 132(4), pages 774-793, December.
- J. Barkley Rosser, 2009. "Introduction," Chapters,in: Handbook of Research on Complexity, chapter 1 Edward Elgar Publishing.
- Ali, Mukhtar M & Greenbaum, Stuart I, 1977. "A Spatial Model of the Banking Industry," Journal of Finance, American Finance Association, vol. 32(4), pages 1283-1303, September. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:49:y:2012:i:2:p:417-445. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.