Acharya, Ram N. Kagan, Albert Richards, Timothy J.
Abstract
This study examines the impact of distance among competing bank locations on market their pricing behavior. A general spatial autoregressive model that nests both spatial autoregressive and spatial error models is used to examine the impact of distance on pricing behavior of 686 non-metro banks in Texas. Results show that non-metro banks exercise market power in pricing their products. An increase in spatial competition may reduce profitability and challenge long term survival of small community based financial institutions.
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Publisher Info
Paper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2006 Annual meeting, July 23-26, Long Beach, CA with number
21453.
Length: Date of creation: 2006 Date of revision: Handle: RePEc:ags:aaea06:21453
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