Geography matters : the impact of geographic expansion on bank performance during the Great Recession

Geographic expansion negatively impacts bank outcomes during recessions. While increases in average bank-to-branch distance for a given bank have a small positive impact on bank performance, increases in average bank-to-branch distance across all banks negatively impact performance as a result of aggregate spillovers. These findings support the existence of economically substantive geographic information asymmetries in banking, emphasizing the need for an explicit consideration of the spatial implications of banking (de-)regulation.