Marquis: Vive la resistance: competing logics and the consolidation of US community banking

16 important questions on Marquis: Vive la resistance: competing logics and the consolidation of US community banking

According to Marquis a changing institutional environment lead some people to be resistant to change. What does this resistance do?

It may spur new entrepreneurial organizations to keep community feeling alive. This may be a new cause of environmental change that large organizations must cope with.

Name 4 examples where the environment induced change:

1. Change brought about by activist movements: f.e. nouvelle activists who broke the strangehold of classical cuisine (Rao)
2. Change brought about by changing market conditions/competitor activity:
- Book shops vs Amazon/other online providers
- Resistance to mergers and acquisitions spawning new entrepreneurship (Marquis)
3. Change brought about by government regulation: f.e. carbon emission regulations

Marquis explored how the growing dominance of nationally oriented banks has been resisted in some US communities. What did they investigate empirically?

How the growth of bank acquisitions by outsider, national firms fostered resistance in the form of new community bank creation. Marquis showed that a community's ability to spwan as a countervailing force new, local banks depended on the existence of a pool of professional bankers.
The effect of professionally driven local bank creation is even greater, when acquisitions were undertaking by out-of-town national banks.
> The creation of new banks in communities was a form of resistance to the efforts of national banks to control resource allocation decisions in those communities.
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How did Marquis gathered data?

He constructed a branch-level database that contains 751581 observations from 1994 to 2002. Data supported all hypotheses, except H4.

The primary causal mechanism behind bank founding is perceived market needs. What does this mean? Formulate hypothesis 1 of Marquis.

New banks are founded to serve newly attractive and underserved market niches left in the wake of mergers.
H1: The more local banks are acquired in a community, the greater the founding rate of new banks in that community.
>> supported

What does increased concentration in a local market trigger? Formulate hypothesis 2 (Marquis)

It may trigger a resource partitioning process that enables new specialist community banks to be created.
H2: The greater the market concentration of a local community, the greater the founding rate of new banks in that community.
>> supported

Marquis thinks that there is a negative relationship between large generalist banks and start-ups. Which hypothesis does he formulates?

H3: The greater the presence of generalist banks in a community, the lower the rate of founding of new banks in that community.
>> Supported

Marquis concludes that a greater number of bank foundings is likely in communities in which there is a strong professional presence. Which hypothesis suits this?

H4: The greater the number of bank professionals in a community, the greater the founding rate of new banks in that community.
>> Not supported

Acquisitions by outsiders can create considerable uncertainty by introducing a new national logic into a community, opening up opportunities for new firm creation. What does Marquis expect and which 2 hypotheses belong to that?

Marquis expect the effect of out-of-town acquisitions on community bank founding to be greater than that of within-community acquisitions, hence:
H5: The greater the numbers of acquisitions by out-of-town banks in a community, the greater the founding rate of new banks in that community
H6: Acquisitions by out-of-town banks in a community will have greater effect on the founding rate of new banks in that community than acquisitions by local banks.
>> Both supported

Describe the last hypothesis of Marquis regarding interaction between local and out-of-town banks:

H7: The greater the interaction between local bank professionals and acquisitions by out-of-town banks in a community, the greater the founding rate of new banks in that community.
>> Supported

What is the theoretical focus of the study of Marquis?

On the mechanisms whereby professional bankers founded new community-oriented commercial banks amidst (midden) regulation-triggered efforts to consolidate their industry.

Marquis examines how some types of acquisitions, conditioned by institutional logics, may systematically open up entrepreneurial opportunities for professionals. What does Marquis show?

He shows that consolidation of local banking markets by community actors does not trigger the creation of new community banks by local professionals but that consolidation promulgated by large national banks does. This finding suggests that particular forms of competitive dynamics related to the clash between community and national logics enable entrepreneurial action.
> Thus sensing entrepreneurial opportunities is not a neutral, objective occurrence but one perhaps embedded in broad institutional dynamics involving competing logics.

What is specifically examined by Marquis?

How the acquisition-driven consolidation efforts of national banks facilitated a form of resistance, namely, the creation of competing community bank by professional bankers, many of whom had left consolidating banks.

In this article Marquis build on the notion that logics can be rooted in geographical differences, highlighting how competing logics can provide a foundation for resistance. What is the aim of Marquis?

He aims to redirect the study of resistance away from a more narrow focus on strategic action to examination of how broader belief systems can shape such dynamics. In particular, Marquis focus on how community-level actors  may operate with a 'community' logic of governance intended to protect local autonomy.

What does Marquis overall argue in his study?

That the national banks' efforts to introduce a banking logic emphasizing efficiencies of geographic diversification triggered new forms of professional entrepreneurialism intended to preserve a community logic of banking.

What does the study of Marquis investigate?

How competing logics facilitate resistance to institutional change, focusing on banking professionals' resistance to large, national bank's acquisitions of smaller, local banks.

The question on the page originate from the summary of the following study material:

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