This study aims to identify the motivations for Japanese regional banks to expand their branch networks, and to clarify whether banks with wide networks of branches can practice region-based relationship banking. We use the data on Japanese regional banks for the Fiscal Years (FY) 2002-06, which...

Because of the unique corporate governance feature of mutual institutions, managers are expected to maximize their own interests at the expense of other stakeholders’ interests. However, this study finds that managers of Japanese mutual banks do not behave as suggested.