chapter  5
Conclusion
WithFranz Flögel
Pages 9

This chapter provides the key findings and deduces practitioner recommendations. It also suggests further research directions. Participant observation supports the theoretical notion that short distance, in terms of organizational and social embeddedness as well as geographical proximity, eases access to information. To estimate the effects of the observed differences in the organization of the credit-granting process one has to consider that clear positive hard information tends to imply positive lending decisions, and definite negative hard information suggests credit rejection regardless of soft information. The geographical classification proposes the place of decision making – in short versus long distance – as one characteristic to distinguish between decentralized and centralized banks, because short distance is associated with enhanced access to information for banks. Therefore, the argument of information advantages for regional banks in small and medium-sized enterprises (SME) lending holds its explanatory power for the geographical classification of banking systems, despite regulation and standardization in retail banking.