<form name="aspnetForm" method="post" action="the-cross-section-of-bank-value?item=the-cross-section-of-bank-value" id="aspnetForm">
<input type="hidden" name="MSOWebPartPage_PostbackSource" id="MSOWebPartPage_PostbackSource" value="" />
<input type="hidden" name="MSOTlPn_SelectedWpId" id="MSOTlPn_SelectedWpId" value="" />
<input type="hidden" name="MSOTlPn_View" id="MSOTlPn_View" value="0" />
<input type="hidden" name="MSOTlPn_ShowSettings" id="MSOTlPn_ShowSettings" value="False" />
<input type="hidden" name="MSOGallery_SelectedLibrary" id="MSOGallery_SelectedLibrary" value="" />
<input type="hidden" name="MSOGallery_FilterString" id="MSOGallery_FilterString" value="" />
<input type="hidden" name="MSOTlPn_Button" id="MSOTlPn_Button" value="none" />
<input type="hidden" name="__REQUESTDIGEST" id="__REQUESTDIGEST" value="noDigest" />
<input type="hidden" name="MSOSPWebPartManager_DisplayModeName" id="MSOSPWebPartManager_DisplayModeName" value="Browse" />
<input type="hidden" name="MSOSPWebPartManager_ExitingDesignMode" id="MSOSPWebPartManager_ExitingDesignMode" value="false" />
<input type="hidden" name="MSOWebPartPage_Shared" id="MSOWebPartPage_Shared" value="" />
<input type="hidden" name="MSOLayout_LayoutChanges" id="MSOLayout_LayoutChanges" value="" />
<input type="hidden" name="MSOLayout_InDesignMode" id="MSOLayout_InDesignMode" value="" />
<input type="hidden" name="MSOSPWebPartManager_OldDisplayModeName" id="MSOSPWebPartManager_OldDisplayModeName" value="Browse" />
<input type="hidden" name="MSOSPWebPartManager_StartWebPartEditingName" id="MSOSPWebPartManager_StartWebPartEditingName" value="false" />
<input type="hidden" name="MSOSPWebPartManager_EndWebPartEditing" id="MSOSPWebPartManager_EndWebPartEditing" value="false" />
<input type="hidden" name="__VIEWSTATE" id="__VIEWSTATE" value="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" />

<script type="text/javascript">
//<![CDATA[
var MSOWebPartPageFormName = 'aspnetForm';
var g_presenceEnabled = true;var _fV4UI=true;var _spPageContextInfo = {webServerRelativeUrl: "\u002f", webLanguage: 1033, currentLanguage: 1033, webUIVersion:4,pageListId:"{229a3fa1-d23f-4194-af04-83f712f16168}",pageItemId:24, alertsEnabled:true, siteServerRelativeUrl: "\u002f", allowSilverlightPrompt:'True'};//]]>
</script>
<script type="text/javascript" src="/_layouts/1033/init.js?rev=mdjxRHK1V7KZ%2BuOTcNNcmQ%3D%3D"></script>
<script src="/WebResource.axd?d=KzYTxvKcuTEp7j51joTea5GVr92AuJ4SL5aQ9QUnLuUrG7rTi8YCbgNYedMwdv6fDwv5Ou7X64HliGCav7hiwmuBylh2hjGhv6JU0lkokc63lAPUBD0MIaMGwGty9ueA82idlgs7ktVQj8-X5TCDW8nNPkA1&t=636767462854137053" type="text/javascript"></script>
<script type="text/javascript">
//<![CDATA[
var dlc_fvsi = {"DefaultViews":[],"ViewUrls":[],"WebUrl":"\/"};//]]>
</script>

<script type="text/javascript">
//<![CDATA[
function _spNavigateHierarchy(nodeDiv, dataSourceId, dataPath, url, listInContext, type) {
    CoreInvoke('ProcessDefaultNavigateHierarchy', nodeDiv, dataSourceId, dataPath, url, listInContext, type, document.forms.aspnetForm, "", "\u002fitem\u002fthe-cross-section-of-bank-value");

}
//]]>
</script>
<input type="hidden" name="__VIEWSTATEGENERATOR" id="__VIEWSTATEGENERATOR" value="7BAFC84E" />
<script type="text/javascript">RegisterSod("sp.core.js", "\u002f_layouts\u002fsp.core.js?rev=7ByNlH\u00252BvcgRJg\u00252BRCctdC0w\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("sp.res.resx", "\u002f_layouts\u002fScriptResx.ashx?culture=en\u00252Dus\u0026name=SP\u00252ERes\u0026rev=b6\u00252FcRx1a6orhAQ\u00252FcF\u00252B0ytQ\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("sp.ui.dialog.js", "\u002f_layouts\u002fsp.ui.dialog.js?rev=Tpcmo1\u00252FSu6R0yewHowDl5g\u00253D\u00253D");RegisterSodDep("sp.ui.dialog.js", "sp.core.js");RegisterSodDep("sp.ui.dialog.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("core.js", "\u002f_layouts\u002f1033\u002fcore.js?rev=Emb5hNX1RZMNXk9oS82yvA\u00253D\u00253D");</script>
<script type="text/javascript">
//<![CDATA[
var _spFormDigestRefreshInterval = 1440000;window.g_updateFormDigestPageLoaded = new Date(); window.g_updateFormDigestPageLoaded.setDate(window.g_updateFormDigestPageLoaded.getDate() -5);function loadMDN2() { EnsureScript('MDN.js', typeof(loadFilterFn), null); }
function loadMDN1() { ExecuteOrDelayUntilScriptLoaded(loadMDN2, 'sp.ribbon.js'); }
_spBodyOnLoadFunctionNames.push('loadMDN1');//]]>
</script>
<script type="text/javascript">RegisterSod("sp.runtime.js", "\u002f_layouts\u002fsp.runtime.js?rev=IGffcZfunndj0247nOxKVg\u00253D\u00253D");RegisterSodDep("sp.runtime.js", "sp.core.js");RegisterSodDep("sp.runtime.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("sp.js", "\u002f_layouts\u002fsp.js?rev=\u00252B4ZEyA892P3T0504qi0paw\u00253D\u00253D");RegisterSodDep("sp.js", "sp.core.js");RegisterSodDep("sp.js", "sp.runtime.js");RegisterSodDep("sp.js", "sp.ui.dialog.js");RegisterSodDep("sp.js", "sp.res.resx");</script><script type="text/javascript">RegisterSod("cui.js", "\u002f_layouts\u002fcui.js?rev=OOyJv78CADNBeet\u00252FvTvniQ\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("inplview", "\u002f_layouts\u002finplview.js?rev=WB6Gy8a027aeNCq7koVCUg\u00253D\u00253D");RegisterSodDep("inplview", "core.js");RegisterSodDep("inplview", "sp.js");</script><script type="text/javascript">RegisterSod("ribbon", "\u002f_layouts\u002fsp.ribbon.js?rev=F\u00252BUEJ66rbXzSvpf7nN69wQ\u00253D\u00253D");RegisterSodDep("ribbon", "core.js");RegisterSodDep("ribbon", "sp.core.js");RegisterSodDep("ribbon", "sp.js");RegisterSodDep("ribbon", "cui.js");RegisterSodDep("ribbon", "sp.res.resx");RegisterSodDep("ribbon", "sp.runtime.js");RegisterSodDep("ribbon", "inplview");</script><script type="text/javascript">RegisterSod("sp.ui.policy.resources.resx", "\u002f_layouts\u002fScriptResx.ashx?culture=en\u00252Dus\u0026name=SP\u00252EUI\u00252EPolicy\u00252EResources\u0026rev=YhBHGmUAGyJ3lAgSdE4V\u00252Fw\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("mdn.js", "\u002f_layouts\u002fmdn.js?rev=gwmFFJ2\u00252FfFacqXWAqG\u00252FqKg\u00253D\u00253D");RegisterSodDep("mdn.js", "sp.core.js");RegisterSodDep("mdn.js", "sp.runtime.js");RegisterSodDep("mdn.js", "sp.js");RegisterSodDep("mdn.js", "cui.js");RegisterSodDep("mdn.js", "ribbon");RegisterSodDep("mdn.js", "sp.ui.policy.resources.resx");</script>
<script type="text/javascript">
//<![CDATA[

function _spNavigateHierarchyEx(nodeDiv, dataSourceId, dataPath, url, listInContext, type, additionalQString) {
    SetAdditionalNavigateHierarchyQString(additionalQString);
    g_originalSPNavigateFunc(nodeDiv, dataSourceId, dataPath, url, listInContext, type);
}

g_originalSPNavigateFunc = _spNavigateHierarchy;
_spNavigateHierarchy = _spNavigateHierarchyEx;
var _fV4UI = true;//]]>
</script>
<script type="text/javascript">RegisterSod("msstring.js", "\u002f_layouts\u002f1033\u002fmsstring.js?rev=QtiIcPH3HV7LgVSO7vONFg\u00253D\u00253D");</script><script type="text/javascript">RegisterSod("browserScript", "\u002f_layouts\u002f1033\u002fnon_ie.js?rev=EVTj1bu32\u00252FMla6SDN\u00252FsNTA\u00253D\u00253D");</script>
<script type="text/javascript">
//<![CDATA[
var __wpmExportWarning='This Web Part Page has been personalized. As a result, one or more Web Part properties may contain confidential information. Make sure the properties contain information that is safe for others to read. After exporting this Web Part, view properties in the Web Part description file (.WebPart) by using a text editor such as Microsoft Notepad.';var __wpmCloseProviderWarning='You are about to close this Web Part.  It is currently providing data to other Web Parts, and these connections will be deleted if this Web Part is closed.  To close this Web Part, click OK.  To keep this Web Part, click Cancel.';var __wpmDeleteWarning='You are about to permanently delete this Web Part.  Are you sure you want to do this?  To delete this Web Part, click OK.  To keep this Web Part, click Cancel.';//]]>
</script>
</form>

Skip to Main Content

02 May 2017Working Paper Summaries

The Cross Section of Bank Value

by Mark Egan, Stefan Lewellen, and Adi Sunderam

How do commercial banks create value? This paper represents the first attempt to empirically identify the primary determinants of cross-sectional variation in bank value. Among the findings: A bank's ability to produce deposits is by far the most important determinant in explaining cross-sectional variation in bank value.

Author Abstract

We study the determinants of value creation within U.S. commercial banks. We begin by constructing two new measures of bank productivity: one focused on deposit-taking productivity and one focused on asset productivity. We then use these measures to evaluate the cross-section of bank value. Both productivity measures are strongly value relevant, with variation in banks' deposit productivity responsible for the majority of variation in bank value. We also find evidence consistent with synergies between deposit-taking and lending activities: banks with high deposit productivity have high asset productivity, a relationship driven by the tendency of deposit-productive banks to hold illiquid loans. Our results suggest that both sides of the balance sheet contribute meaningfully to bank value creation, with the liability side playing a primary role.

Paper Information

Full Working Paper Text
Working Paper Publication Date: May 2017
HBS Working Paper Number: NBER 23291
Faculty Unit(s): Finance

Trending

- 21 May 2020
- Coronavirus
Fighting the COVID Blues: Advice from Business Research
- 01 May 2020
- What Do You Think?
Does Remote Work Mix with Organizational Culture?
- 25 May 2020
- Research & Ideas
Has Occupational Licensing Outlived Its Usefulness?
- 16 Mar 2020
- Coronavirus
How the Coronavirus Is Already Rewriting the Future of Business
- 26 Mar 2020
- Coronavirus
7 Leadership Principles for Managing in the Time of Coronavirus

Adi Sunderam

Marvin Bower Associate Professor

Contact

→ More Articles

Find Related Articles

Sign up for our weekly newsletter

Interested in improving your business? Learn about fresh research and ideas from Harvard Business School faculty.