Abstract: Historical Conflict and New Bank Foundings in US Communities in the 1990s

Christopher Marquis and Michael Lounsbury

Abstract

In this paper, we investigate how competing organizing logics facilitate resistance to institutional change. In particular, we examine how banking professionals resisted efforts of larger banks to expand their domains by acquiring smaller banks within individual communities. Drawing on historical evidence of tension between community and national banking interests, we argue that it was the effort of national banks to introduce a national logic of banking, emphasizing the efficiencies of geographic diversification, that triggered new forms of professional entrepreneurialism to preserve a community logic of banking and maintain local control banking infrastructures. Analyzing a detailed community-level dataset of U.S. bank activity, our results show that acquisitions in communities lead to new bank foundings, and that this pattern is particularly pronounced when the acquisitions are by out-of-town banks and when there is a larger population of bank professionals. We discuss how our study contributes to the emerging synthesis of ecological and institutional perspectives, entrepreneurship, and our understanding of resistance to institutional change.