Abstract |
Because of the unstable financial market after World War I, the Japanese financial system experienced a wave of bank mergers, which resulted in an increase in bank scale and the development of branch banking. In this paper, we explored the implications of
the expansion of branch banking, using bank-office-level data for Fukushima Prefecture.
We found that branch offices that belonged to banks headquartered in other cities,
counties, or prefectures tended to have a lower propensity to loan compared with the
offices of banks headquartered in the same cities and counties as the offices. We also find
that concentration of deposits on bank offices headquartered in other cities, counties, or
prefectures had a substantial negative impact on the development of the weaving
industry. The structural change in the banking industry after World War I altered the
spatial allocation of funds and thereby affected the development of regional industries. |