Shadow Banking and Branch Networks: An Analysis of Lending Patterns and Strategic Branching Decisions in the U.S. Mortgage Market
This paper explores the effects of cannibalization and business-stealing within the lenders’ branch networks in the U.S. shadow banking mortgage market. Given the difficulty in obtaining data related to the shadow bank branch network, a novel dataset, the Your-Economy Time Series dataset, is introduced to provide details on shadow bank branch locations from 2012 to 2017. Implementing a two-stage least squares approach shows that having a branch increases the lender’s market share.