earticle

영어

The main purpose of the paper is to examine the effects of locational characteristics to the competitiveness of regional financial institutions in small and mediumsized cities. An empirical analysis was done based on the data, collected from branches of financial institutions in Cheon-An City, with a time frame from 2009 to 2011 for 3 years. Some interesting results were derived as follow: First, it was found, based on the multiple regression analysis, the number of VIP customers and competing branches are the most important variables affecting the competitiveness of the regional financial institution in small and medium-sized cities. Among them, it turns out that the number of competing branches has been the most influential factor. It is estimated that asset under trust decreases about 1.52 billion Korean won as one additional competing branch opens. The result differs from the previous studies which pointed out that the most influential factors for branches of financial institutions were the number of households, business entities and VIP customers. Second, it also turns out that land zoning has strong positive relation with asset under trust. If a financial branch locates in commercial area, it can attract much higher asset under trust than other branches in non-commercial area. Finally, when assessing location for opening a new branch in small to medium size of cities in countryside, careful consideration needs to be made even for non-competing area, not to mention for competitive environment. It is recommended that a decision to open a branch of financial institution need to be made based on master development plan and development status within the area.