Publications
Publications
- Forthcoming
- Review of Financial Studies
The Cross Section of Bank Value
By: Mark Egan, Stefan Lewellen and Adi Sunderam
Abstract
We study the determinants of value creation in U.S. commercial banks. We develop novel measures of individual banks' productivities at collecting deposits and making loans. We relate these measures to bank market values and find that deposit productivity is responsible for about two-thirds of the value of the median bank, as well as the majority of variation in value across banks. We show that variation in productivity is driven by differences across banks in technology, customer demographics, and market power. We also find evidence of synergies between deposit-taking and lending. Our findings suggest that there is significant heterogeneity in banks' abilities to capture value by manufacturing safe assets.
Keywords
Citation
Egan, Mark, Stefan Lewellen, and Adi Sunderam. "The Cross Section of Bank Value." Review of Financial Studies (forthcoming).
