TY - JOUR
T1 - Bank on it: Do Local Banks Contribute to Rural Community Prosperity?
AU - Mencken, F. Carson
AU - Carpenter, Craig Wesley
AU - Lotspeich-Yadao, Michael
AU - Tolbert, Charles M.
N1 - Funding Information:
This analysis was conducted at the Texas Research Data Center where the authors hold Special Sworn Status. Any opinions and conclusions expressed herein are those of the authors and do not necessarily represent the views of the U.S. Census Bureau. All results have been reviewed to ensure that no confidential information is disclosed. Data are secure data located within the Texas Research Data Center and not available to researchers who do not have certified access. However, program code, which was used to create the analysis, is available upon request. A portion of this research was funded by USDA‐NIFA, AFRI No. TEXR‐2010‐04719. Address correspondence to F. Carson Mencken, 97326 One Bear Place, Baylor University, Waco, TX 76798‐7236, USA. Email: [email protected]
Publisher Copyright:
© 2023 The Authors. Rural Sociology published by Wiley Periodicals LLC on behalf of Rural Sociological Society (RSS).
PY - 2023/9
Y1 - 2023/9
N2 - Recent research on the restructuring of the financial industry from local banks to interstate conglomerates has raised questions about the impact on nonmetropolitan economies. In this paper, we develop two competing hypotheses and scrutinize the impact of local bank concentration (percent banks that are locally headquartered) on four measures of economic growth from 1980 to 2010 in metropolitan, micropolitan, and non-core Commuting Zones (CZs). We employ fixed effects panel regression models for the 1980–2010 time frame. We find that local bank concentration is positively related to business births and establishment dynamics in non-core and micropolitan CZs. The effects of local banking on measures of income and wages fail to show consistent effects. There are no positive local banking concentration effects on economic growth in metropolitan CZs during this time frame. Implications for theory, research, and policy are discussed.
AB - Recent research on the restructuring of the financial industry from local banks to interstate conglomerates has raised questions about the impact on nonmetropolitan economies. In this paper, we develop two competing hypotheses and scrutinize the impact of local bank concentration (percent banks that are locally headquartered) on four measures of economic growth from 1980 to 2010 in metropolitan, micropolitan, and non-core Commuting Zones (CZs). We employ fixed effects panel regression models for the 1980–2010 time frame. We find that local bank concentration is positively related to business births and establishment dynamics in non-core and micropolitan CZs. The effects of local banking on measures of income and wages fail to show consistent effects. There are no positive local banking concentration effects on economic growth in metropolitan CZs during this time frame. Implications for theory, research, and policy are discussed.
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U2 - 10.1111/ruso.12488
DO - 10.1111/ruso.12488
M3 - Article
AN - SCOPUS:85152792653
SN - 0036-0112
VL - 88
SP - 657
EP - 681
JO - Rural Sociology
JF - Rural Sociology
IS - 3
ER -