Resource Partitioning and the Organizational Dynamics of "Fringe Banking"

Giacomo Negro*, Fabiana Visentin, Anand Swaminathan

*Corresponding author for this work

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17 Citations (Web of Science)


We examine the emergence and proliferation of payday lenders, fringe businesses that provide small short-term, but high-cost loans. We link the organizational dynamics of these businesses to two trends in consumer lending in the united states: the continuing consolidation of mainstream financial institutions; and the expansion of such institutions in the provision of financial services regarded as similar to payday loans. We explain the coexistence in mature industries of large-scale organizations in the market center and smaller specialists in the periphery by testing and extending the organizational model of resource partitioning. Our focus is on two under-examined aspects of the model: the dynamic underlying the partitioning process, and the conditions under which the market remains partitioned. The empirical analysis covers payday lenders, banks, and credit unions operating in wisconsin between 1994 and 2008.
Original languageEnglish
Pages (from-to)680-704
Number of pages25
JournalAmerican Sociological Review
Issue number4
Publication statusPublished - Aug 2014
Externally publishedYes


  • sociology of markets
  • organization theory
  • resource partitioning
  • consumer credit
  • payday lending

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