Shadow Bank Branch Networks in the United States Mortgage Market
Loading...
Authors
Bui, Long
Date
2024-07-29
Type
thesis
Language
eng
Keyword
Shadow banks , Banking competition , Branch networks , Competition
Alternative Title
Abstract
This dissertation explores the role and impact of shadow banks in the U.S. mortgage market through three interrelated studies. Following the global financial crisis, shadow banks rose to prominence, accounting for approximately half of U.S. mortgage originations by 2017. Despite technological advancements that reduce the need for physical branches, shadow banks maintain a tangible branch presence. The first study constructs a unique dataset by combining the Your-Economy Time Series dataset with the Home Mortgage Disclosure Act dataset, identifying active shadow bank lenders and their branch operations across the lower 48 states. This novel dataset was validated by matching it with the Summary of Deposits dataset for traditional banks, showing high reliability. The analysis reveals that shadow banks maintain branches across the U.S. but concentrate their branch operations in a select few. The second study examines the effects of shadow bank branches on market share and branching decisions. Using a two-stage least squares approach and a structural model, based on a many-player game with simultaneous moves under incomplete information, the study finds that additional branches increase market share, but the effect diminishes due to cannibalization and competition from rival branches. These factors also reduce the likelihood of shadow banks opening new branches. The third study investigates the competitive effects of mergers between shadow banks on interest rates at the county level. Utilizing loan-level regressions, two-way fixed effects regression models, and event studies, the analysis shows a small increase in interest rates following mergers, although not always statistically significant. This result suggests that competitive pressures persist due to the presence of numerous lenders and low market concentration. In summary, this dissertation provides insights into shadow banks' operations, competitive dynamics, and geographical distribution in the U.S. mortgage market. It shows the concentrated nature of shadow bank operations, branch expansion's diminishing returns, and mergers' competitive effects.
Description
Citation
Publisher
License
Queen's University's Thesis/Dissertation Non-Exclusive License for Deposit to QSpace and Library and Archives Canada
ProQuest PhD and Master's Theses International Dissemination Agreement
Intellectual Property Guidelines at Queen's University
Copying and Preserving Your Thesis
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.
Attribution-NonCommercial-NoDerivatives 4.0 International
ProQuest PhD and Master's Theses International Dissemination Agreement
Intellectual Property Guidelines at Queen's University
Copying and Preserving Your Thesis
This publication is made available by the authority of the copyright owner solely for the purpose of private study and research and may not be copied or reproduced except as permitted by the copyright laws without written authority from the copyright owner.
Attribution-NonCommercial-NoDerivatives 4.0 International