Move a little closer? Information sharing and the spatial clustering of bank branches

By Shusen Qi, Ralph De Haas, Steven Ongena, Stefan Straetmans

We study how information sharing between banks influences the geographical clustering of branches. By using dynamic data on 59,333 branches operated by 676 banks in 22 countries between 1995 and 2012, we find that information sharing spurs banks to open branches in localities that are new to them, but that are already well served by other banks. Information sharing also allows firms to borrow from more distant banks.