An Examination of Entry and Competitive Performance in Rural Banking Markets
AbstractThis paper explores the change in the level of competition in rural banking markets since the deregulation that occurred following passage of the Riegle Neal Act of 1994. Using an empirical model that utilizes both the number of banks and the value of deposits in a cross-section of rural markets, we decompose the impact of the entry of new banks into resulting changes in per capita demand and the costs/profits of local banks in both 1994 and 2004. We conclude that the banking market is more competitive today despite the fact that the number of banks may have declined; on average fewer banks are now needed to make rural banking markets competitive than were needed in 1994.
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Bibliographic InfoPaper provided by American University, Department of Economics in its series Working Papers with number 2008-05.
Length: 24 pages
Date of creation: May 2008
Date of revision:
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Web page: http://www.american.edu/cas/economics/
Other versions of this item:
- Robert M. Feinberg & Kara M. Reynolds, 2010. "An Examination of Entry and Competitive Performance in Rural Banking Markets," Southern Economic Journal, Southern Economic Association, vol. 76(3), pages 624-637, January.
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-11-04 (All new papers)
- NEP-BAN-2008-11-04 (Banking)
- NEP-COM-2008-11-04 (Industrial Competition)
- NEP-CSE-2008-11-04 (Economics of Strategic Management)
- NEP-IND-2008-11-04 (Industrial Organization)
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