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Branch Expansion of Commercial Banks in Rural America

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  • Nam, Sangjeong
  • Ellinger, Paul N.

Abstract

The main objective of this study is to identify the financial and market characteristics of commercial banks' branch expansion decision. The nested logit model is used to analyze the characteristics to affect the expansion decision and location choice of commercial banks due to a two-level nesting structure for branch expansion decision. The probability that banks with high deposit growth rate, assets, loan to deposit ratio or more branches open branches in rural area is less than the probability that those open branches in both areas. However, banks with high deposit growth rate, asset, loan to deposit ratio, agricultural loan rate, ROA and rural head office are more likely to open branches in both areas rather than in urban area.

Suggested Citation

  • Nam, Sangjeong & Ellinger, Paul N., 2008. "Branch Expansion of Commercial Banks in Rural America," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6438, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  • Handle: RePEc:ags:aaea08:6438
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    File URL: http://purl.umn.edu/6438
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    References listed on IDEAS

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    Keywords

    Community/Rural/Urban Development;

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