This Is AuburnElectronic Theses and Dissertations

Essays on Banking and Housing




Xu, Jiayi

Type of Degree

PhD Dissertation



Restriction Status


Restriction Type


Date Available



In 1865, the first minority bank in the United States was established. Over time, banks owned or controlled by minorities have grown in number. Yet, one hundred and fifty years later, they still account for only 2.8 percent of all banks. The contribution of this paper is fourfold. First, it provides a comprehensive assessment of the role and importance of different categories of MDIs in the banking industry. Second, it contributes to an understanding of the extent to which the diversity of ownership/control affects the performance and riskiness of firms, but is among the few that does so in terms of minority ownership/control of banks. Third, the paper examines the recent performance of MDIs from the perspective of whether their disproportionately small role in the banking industry is due to their relatively poorer and riskier performance as compared to non-MDIs. Fourth, a check on the robustness of the results is provided, including for the first time using two different databases on MDIs. The results indicate that MDIs, in contrast to most previous studies, are not significantly less profitable or riskier than non-MDIs. The second essay uses nationwide census tract-level data to examine the relationship between credit market competition change and loan rates. Results show that an increase in competition of the banking industry, measured by the presence of a new bank branch, in a census tract, causes a decrease in the average loan rates in the following six months. On the other hand, a decrease in competition, measured by the occurrence of a branch closure in a census tract, causes an increase in the average loan rates after three quarters. The effects are community bank openings and closures. In addition, evidence supports the herd behavior of new bank branches documented by previous literature. Large plant openings have been shown to impact the region in which they are located in a variety of ways. Traditional agglomeration economic arguments posit a host of potential benefits that might accrue to the new plant and incumbent plants in the area. When firms decide to open plants in areas without the benefit of agglomeration economies, the reason is often assigned as the firm responding to municipal or state incentives. The question naturally arises as to whether those incentives, financed via local or state taxes, are being offered in a considered way. Housing impacts are often overlooked as a possible if the partial, justification of those industrial incentives. This study analyzes housing market impacts in a rural area from the opening of a large manufacturing plant. Results of the third essay indicate that a large plant opening in a rural county is associated with an increase in housing prices relative to prices observed in a comparable control county.