Wednesday, March 6, 2019

Department Seminar Series - Michael G. Jacobides - LBS - Friday, April 5th 2019

The Management Department

Department Seminar Series

Michael G. Jacobides

Friday, April 5th 2019

   Room LE CLUB  at 10:00 am

Theme“Scope Transformation and Relatedness in U.S. Banking: Patterns and Performance Implications”

   Abstract: Using a novel database of the organizational structure of bank holding companies, this paper presents the first population-wide study of the transformation in business scope in a sector, with particular focus on where banks expand. We show that moving into new areas has a significantly higher impact than diversifying into existing areas, and that expanding scope hasa negative impact on average performance. However, as financial intermediation has evolved over twenty-five years, a shifting set of different activities became associated with “core banking”, with relatedness itself changing over the banking sectors’ history. Banks that expand activity scope while staying close to this evolving core have attained net performance benefits. We thus confirm the value of relatedness, and document its evolutionary features and performance impact.).