This paper investigates the drivers of bank branch closures since 2008. The main aim of the paper is to assess how the proximity of branches, both from the same bank and from competing banks, and the characteristics of the local market, have had an impact on how banks restructured their branch network.
The probability that a bank branch is closed down is higher for smaller branches, for those with a low activity per employee. It also increases in the proximity to other branches, competitors' included, and it is larger in areas where the presence of small firms is low, the broadband internet is more diffused and for those banks that have more accumulated ICT capital - which both facilitates the use of remote interaction with customers - and for larger banks and those intermediaries that are more oriented to wholesale funding.
