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Article Dans Une Revue Review of Finance Année : 2011

The Efficiency of Capital Allocation: Do Bank Regulations Matter?

Résumé

We document that the deregulation of bank branching restrictions in the United States triggered a reallocation across sectors, with end effects on state-level volatility. The change cannot be explained simply by shifts in sector-level returns and volatility. A reallocation effect is at play, which we study in the context of mean-variance portfolio theory applied to sectoral returns. We find the reallocation is particularly strong in sectors characterized by young, small and external finance dependent firms, and for states that have a larger share of such sectors. The findings suggest that improving bank access to branching affects the sectoral specialization of output, in a manner that depends on the variance-covariance properties of sectoral returns, rather than on their average only.

Dates et versions

hal-00612321 , version 1 (28-07-2011)

Identifiants

Citer

Viral V. Acharya, Jean Imbs, Jason Sturgess. The Efficiency of Capital Allocation: Do Bank Regulations Matter?. Review of Finance, 2011, 15 (1), pp.135-172. ⟨10.1093/rof/rfq009⟩. ⟨hal-00612321⟩
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