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Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example
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Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example

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  • Gärtner, Stefan
  • Flögel, Franz

Abstract

We are calling for comparisons of banking and banking systems from a spatial perspective. Therefore, this paper develops a classification identifying decentralized and centralized banking according to two characteristics: geographical market orientation (regional vs. supraregional) – to determine whether banks facilitate regional savings-investment cycles – and place of decision-making (proximity vs. distance) – to identify whether the flow of soft information is supported in SME lending. The degree of banks’ centralization is also approximated by the spatial concentration of bank employees and shows remarkable explanatory power in Germany, as de-centralized banks increase lending at the expense of centralized banks.

Suggested Citation

  • Gärtner, Stefan & Flögel, Franz, 2014. "Call for a Spatial Classification of Banking Systems through the Lens of SME Finance - Decentralized versus Centralized Banking in Germany as an Example," IAT Discussion Papers 14/01, Institut Arbeit und Technik (IAT), Westfälische Hochschule, University of Applied Sciences.
    • Handle: RePEc:zbw:iatdps:1401
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    More about this item

    Keywords

    comparing banking systems; SME finance in Germany; savings and cooperative banks; decentralized vs. centralized banking;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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