Information Production and Capital Allocation: Decentralized versus Hierarchical Firms

By Jeremy C. Stein. 2002

717 citations recorded by the source corpus.

Subfields: Accounting, Finance, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/ae43b128368f5992bcf910c4ac038ed64bf2576d

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Citations in the corpus

Stronger Risk Controls, Lower Risk: Evidence from U.S. Bank Holding Companies (2012, neutral): “As highlighted by past research (Stein (2002)), the organizational structure of the risk management function is likely to be important in determining how effectively qualitative and quantitative information on risk is shared between the top management and the individual business segments.”
Informed and Uninformed Investment in Housing: The Downside of Diversification (2011, positive): “…within the firm suggest that focused lenders – such as lenders concentrating on one or a small number of local markets – may have both better ability and stronger incentives to collect information that is costly to transmit to others (Stein, 2002; Berger et al, 2005; Liberti and Mian, forthcoming).”
Relationship and Transaction Lending in a Crisis (2013, positive): “This is in line with Stein (2002) who points out that the internal management problem of very large intermediaries may induce these banks to rely solely on hard information, in order to align the incentives of the local managers with the headquarters.”
The Impact of Bank Consolidation on Commercial Borrower Welfare (2005, neutral): “(Stein (2002)).”
Does Fund Size Erode Performance? Liquidity, Organizational Diseconomies and Active Money Management (2003, neutral): “Stein (2002) argues that in the presence of such hierarchy costs, small organizations ought to outperform large ones at tasks that involve the processing of soft information, i.e., information that cannot be directly verified by anyone other than the agent who produces it.”
Banking and Trading (2012, neutral): “Indeed, expanding the relationship banking customer base may be costly because of adverse selection (Dell’Ariccia and Marquez, 2006) or difficulties in processing large amounts of soft information (Gale, 1993; Stein, 2002).”
Costly Information Processing: Evidence from Earnings Announcements (2008, neutral): “Finally, my paper relates to the corporate finance literature that analyzes the differences in soft and hard information (Petersen (2004)) and their impact on lending decisions (Stein (2002)).”
'Lending by Example': Direct and Indirect Effects of Foreign Banks in Emerging Markets (2012, neutral): “Foreign banks are often large and centralized and may therefore lack the organizational dexterity to successfully engage small and young firms, which are considered to be particularly opaque (Stein (2002), Berger, Miller, Petersen, Rajan and Stein (2005)).”
Harming Depositors and Helping Borrowers: The Disparate Impact of Bank Consolidation (2009, neutral): “Theories of organization diseconomies, such as Williamson (1967) and Stein (2002), predict that LMBs may face higher costs of servicing small businesses and consumers.”
Regulatory Reform and Productivity Change in Indian Banking (2013, neutral): “For example, Stein (2002) suggests that foreign banks may be less able to process soft information about local firms and therefore may prefer to lend to more transparent larger firms.”
Further Evidence on the Link between Finance and Growth: An International Analysis of Community Banking and Economic Performance (2003, neutral): “…Berger and Udell 1996, Carter, McNulty, and Verbrugge 2004), c) have shorter and less exclusive relationships (Berger, Miller, Petersen, Rajan, and Stein 2002), d) base their lending decisions more on financial ratios rather than prior relationships (Cole, Goldberg, and White 1999, Berger,…”
Bank Branch Presence and Access to Credit in Low-to-Moderate Income Neighborhoods (2010, neutral): “Mortgages, on the other hand, have traditionally not been viewed as relationship loans (Stein, 2002, p. 1892).”
Bank Size and Lending Relationships in Japan (2008, positive): “4 Stein (2002) shows that small banks with simple organizational structures have comparative advantages in producing soft information and thereby excel at providing relationship lending. A number of papers have found empirical evidence consistent with this theory particularly in the U.S. context (e.”
Does Function Follow Organizational Form? Evidence from the Lending Practices of Large and Small Banks (2005, neutral): “However, Stein (2002) argues that just the opposite may be the case.”