The primary objective of this research was to examine the potential impact of financial deregulation on capital availability in nonmetropolitan areas of Virginia by determining whether bank behavior and performance vary by the institutional structure of the bank. The research approach combines a case study analysis of bank decision making with an aggregate analysis of operating ratios that are important indicators of bank performance. The lexicographic ordering technique is used to test the behavioral hypothesis that rural banks affiliated with a multi-bank holding company have the same operating goals as rural independent unit banks. The corollary behavioral hypothesis that rural affiliate banks have the same operating flexibility as rural independent banks was tested by using the case studies to identify the administrative level at which policies are set and the influence of local conditions on the policy making process. The hypothesis that the market performance of rural affiliate banks is the same as that of independent banks was tested by using discriminant analysis to determine the statistical significance of bank operating ratios in distinguishing between rural affiliate banks from rural independent banks.
The test of the behavioral hypothesis provided limited evidence of differences in the operating goals of rural affiliate and independent banks and, therefore, the behavioral hypothesis was not rejected. The case studies identified important differences in operating flexibility, with independent bankers having greater flexibility in decision making. Therefore, the corollary behavioral hypothesis was rejected. The results of the discriminant analysis showed no striking performance differences, providing no basis for rejecting the performance hypothesis. However, two ratios were important in separating independent banks from affiliate banks. The equity capital/total assets ratio and the agricultural loans/total loans ratio were higher for independent banks. This study also identified a difference in the potential range of services offered by the banks, with affiliates able to utilize the full range of financial and human resources of the holding company to meet local capital needs.
This study identified differences between independent banks and affiliate banks that result from their differing institutional structures. These differences will most likely persist in a post-deregulation environment and suggest that financial deregulation may affect future capital availability in nonmetropolitan areas of Virginia. / Ph. D.
| Identifer | oai:union.ndltd.org:VTETD/oai:vtechworks.lib.vt.edu:10919/74702 |
| Date | January 1984 |
| Creators | Markley, Deborah M. |
| Contributors | Agricultural Economics |
| Publisher | Virginia Polytechnic Institute and State University |
| Source Sets | Virginia Tech Theses and Dissertation |
| Language | en_US |
| Detected Language | English |
| Type | Dissertation, Text |
| Format | xi, 205 leaves, application/pdf, application/pdf |
| Rights | In Copyright, http://rightsstatements.org/vocab/InC/1.0/ |
| Relation | OCLC# 11223699 |
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