Table 7 Open in new tab Return on loans...

	ROL
Branch level	−0.007***	−0.010***	−0.006***	−0.003**
	(0.002)	(0.002)	(0.002)	[0.011]
\|${\rm Before}^{-2}$\|					−0.001	−0.000
					(0.003)	(0.003)
\|${\rm Before}^{0}$\|					−0.007**	−0.010***
					(0.003)	(0.003)
\|${\rm After}^{2}$\|					−0.003	−0.010***
					(0.003)	(0.002)
\|${\rm After}^{4+}$\|					−0.008***	−0.012***
					(0.003)	(0.002)
Observations	54,079	54,079	54,079		54,079	54,079
Adj-\|$R^{2}$\|	0.155	0.136	0.207		0.155	0.136
Branch FEs	Y	Y	Y		Y	Y
Quarter FEs	Y	Y	N		Y	Y
Quarter-district FEs	N	N	Y		N	N

ROL

Equally weighted

Value weighted

Difference (2)-(1)

Equally weighted

Value weighted

(1)

(2)

(3)

(4)

(5)

(6)

Branch level

−0.007***

−0.010***

−0.006***

−0.003**

(0.002)

[0.011]

|${\rm Before}^{-2}$|

−0.001

−0.000

(0.003)

|${\rm Before}^{0}$|

−0.007**

−0.010***

(0.003)

|${\rm After}^{2}$|

−0.003

−0.010***

(0.003)

(0.002)

|${\rm After}^{4+}$|

−0.008***

−0.012***

(0.003)

(0.002)

Observations

54,079

Adj-|$R^{2}$|

0.155

0.136

0.207

0.155

0.136

Branch FEs

Quarter FEs

Quarter-district FEs

	ROL
Branch level	−0.007***	−0.010***	−0.006***	−0.003**
	(0.002)	(0.002)	(0.002)	[0.011]
\|${\rm Before}^{-2}$\|					−0.001	−0.000
					(0.003)	(0.003)
\|${\rm Before}^{0}$\|					−0.007**	−0.010***
					(0.003)	(0.003)
\|${\rm After}^{2}$\|					−0.003	−0.010***
					(0.003)	(0.002)
\|${\rm After}^{4+}$\|					−0.008***	−0.012***
					(0.003)	(0.002)
Observations	54,079	54,079	54,079		54,079	54,079
Adj-\|$R^{2}$\|	0.155	0.136	0.207		0.155	0.136
Branch FEs	Y	Y	Y		Y	Y
Quarter FEs	Y	Y	N		Y	Y
Quarter-district FEs	N	N	Y		N	N

Table 7

Open in new tab

Return on loans

	ROL
	Equally weighted	Value weighted	Value weighted	Difference (2)-(1)	Equally weighted	Value weighted
	(1)	(2)	(3)	(4)	(5)	(6)
Branch level	−0.007***	−0.010***	−0.006***	−0.003**
	(0.002)	(0.002)	(0.002)	[0.011]
\|${\rm Before}^{-2}$\|					−0.001	−0.000
					(0.003)	(0.003)
\|${\rm Before}^{0}$\|					−0.007**	−0.010***
					(0.003)	(0.003)
\|${\rm After}^{2}$\|					−0.003	−0.010***
					(0.003)	(0.002)
\|${\rm After}^{4+}$\|					−0.008***	−0.012***
					(0.003)	(0.002)
Observations	54,079	54,079	54,079		54,079	54,079
Adj-\|$R^{2}$\|	0.155	0.136	0.207		0.155	0.136
Branch FEs	Y	Y	Y		Y	Y
Quarter FEs	Y	Y	N		Y	Y
Quarter-district FEs	N	N	Y		N	N

	ROL
	Equally weighted	Value weighted	Value weighted	Difference (2)-(1)	Equally weighted	Value weighted
	(1)	(2)	(3)	(4)	(5)	(6)
Branch level	−0.007***	−0.010***	−0.006***	−0.003**
	(0.002)	(0.002)	(0.002)	[0.011]
\|${\rm Before}^{-2}$\|					−0.001	−0.000
					(0.003)	(0.003)
\|${\rm Before}^{0}$\|					−0.007**	−0.010***
					(0.003)	(0.003)
\|${\rm After}^{2}$\|					−0.003	−0.010***
					(0.003)	(0.002)
\|${\rm After}^{4+}$\|					−0.008***	−0.012***
					(0.003)	(0.002)
Observations	54,079	54,079	54,079		54,079	54,079
Adj-\|$R^{2}$\|	0.155	0.136	0.207		0.155	0.136
Branch FEs	Y	Y	Y		Y	Y
Quarter FEs	Y	Y	N		Y	Y
Quarter-district FEs	N	N	Y		N	N

This table reports the effect of organizational structure on the equally weighted and value-weighted return on loans (Columns 1, 2, and 3) and its dynamics (Columns 5 and 6) using specification (1). Column 3 reports the effect on value-weighted returns after controlling for local demand shocks through quarter-district fixed effects instead of quarterly fixed effects. Column 4 reports the difference between the estimated coefficients on equally and value-weighted returns. The unit of analysis is branch-quarter return on loans. First, we estimate the return for each loan, as defined in Equation (2). Then we aggregate the loan-level estimate at the branch-quarter level using equal or value weights. The variable Branch Level is a number between 1 and 3, where the lowest value (level 1) and the highest value (level 3) characterize the least hierarchical branches and the most hierarchical branches, respectively. |$\mbox{Before}^{-2}$| is a dummy variable that equals 1 (⁠|$-1$|⁠) if the branch was upgraded (downgraded) in one or two quarters. |$\mbox{Before}^{0}$| is a dummy variable that equals 1 (⁠|$-1$|⁠) if the branch was upgraded this quarter or one quarter ago. |$\mbox{After}^{2}$| is a dummy variable that equals 1 (⁠|$-1$|⁠) if the branch was upgraded (downgraded) two or three quarters ago. |$\mbox{After}^{4+}$| is a dummy variable that equals 1 (⁠|$-1$|⁠) if the branch was upgraded (downgraded) four quarters ago or more. Standard errors in parentheses are corrected for clustering at the branch level. p-values are reported in brackets. * significant at 10%; ** significant at 5%; and *** significant at 1%.

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