A Study of Cross-Market Branch Banking in Illinois: A Multiple Regression Quadratic Assignment Procedure Approach

This paper investigates the role of a host of geographical factors in shaping the cross-market branch banking network, using Illinois as a case study. The study adopts the multiple regression quadratic assignment procedure from social network analysis in non-parametric estimation. The research finds that cross-market branch banking is subject to distance decay. While the urban place hierarchy (including market size and population density) contributes positively to the role of places as control centers, its role in forming cross-market branch banking markets is more profound. The network centrality contributes positively to places' role as market centers, as does market concentration. Income level is positively associated with the role of control centers. Inward interstate banking tends to weaken the role of a place as a control center and market center. The information, art/entertainment, and government sectors play a positive role in attracting branch banking while the role of the retail is negative. The information industry is also a positive factor in forming control centers.