The multimarket contact hypothesis holds that more contacts between firms competing in the same markets may induce more collusion. This paper tests the hypothesis for the Italian banking market, analysing the behaviour of the largest Italian banks from 1990 to 1996. Market rivalry is gauged by changes in loan market shares and interest rates in each Italian province. Different measures of multimarket contacts are built. We estimate the effects of increasing multimarket contacts, concentration indicators, banks' costs and loan growth on variations in market shares and interest rates.
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Paper provided by Banca Italia - Servizio di Studi in its series Papers with number
387.
Find related papers by JEL classification: G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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