TY  - JOUR
AU  - Goetz,Martin
AU  - Laeven,Luc
AU  - Levine,Ross
TI  - The Valuation Effects of Geographic Diversification: Evidence from U.S. Banks
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 17660
PY  - 2011
Y2  - December 2011
UR  - http://www.nber.org/papers/w17660
L1  - http://www.nber.org/papers/w17660.pdf
N1  - Author contact info:
Martin Goetz
Financial Economist
Federal Reserve Bank of Boston
600 Atlantic Avenue
Boston, MA  02210
E-Mail: Martin.Goetz@bos.frb.org

Luc Laeven
Deputy Division Chief
International Monetary Fund
700 19th Avenue, NW
Washington, DC 20431
Tel: 202/623-9020
Fax: 202/623-4740
E-Mail: Llaeven@imf.org

Ross Levine
Haas School of Business
University of California at Berkeley
545 Student Services Building, #1900 (F685)
Berkeley, CA 94720-1900
Tel: 510-643-1419
E-Mail: Ross_levine@haas.berkeley.edu
AB  - This paper assesses the impact of the geographic diversification of bank holding company (BHC) assets across the United States on their market valuations. Using two novel identification strategies based on the dynamic process of interstate bank deregulation, we find that exogenous increases in geographic diversity reduce BHC valuations. These findings are consistent with the view that geographic diversity makes it more difficult for shareholders and creditors to monitor firm executives, allowing corporate insiders to extract larger private benefits from firms.
ER  -