Intensity of Competition and Market Structure in the Italian Banking Industry
AbstractThis work tests the predictions of Sutton’s model of independent submarkets for the Italian retail banking industry. In the first part of this paper, I develop a model of endogenous mergers to evidence the relationship between firms’ conduct, market entry and market structure. In the second part, I identify the submarket dimension and estimate the relationship between market size and market structure using data on bank branches. The size of the submarkets turned out to be at most provincial whereas the limiting concentration index - as argued by Sutton for industries with exogenous sunk costs - goes to zero as the market becomes larger.
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Bibliographic InfoPaper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2008-43.
Date of creation: 2008
Date of revision:
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Web page: http://center.uvt.nl
Concentration; Truncated Poisson and Negative Binomial models; quantile regressions;
Other versions of this item:
- GIANNETTI, Caterina, 2007. "Intensity of competition and market structure in the Italian banking industry," CORE Discussion Papers 2007041, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L89 - Industrial Organization - - Industry Studies: Services - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-06-07 (All new papers)
- NEP-BEC-2008-06-07 (Business Economics)
- NEP-COM-2008-06-07 (Industrial Competition)
- NEP-CSE-2008-06-07 (Economics of Strategic Management)
- NEP-IND-2008-06-07 (Industrial Organization)
- NEP-MIC-2008-06-07 (Microeconomics)
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