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We examine the determinants of entry into Italian local banking markets during the period 1991-2002 and build a simple model in which the probability of branching in a new market depends on the features of both the local market and the potential entrant. Econometric findings show that banks are more likely to expand into those markets that are closest to their pre-entry locations. Large banks are also more able to cope with distance-related entry costs than small banks. Finally, banks have become increasingly able to open branches in distant markets, due to the advent of information and communication technologies. Copyright 2008 The Authors. Journal compilation 2008 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.

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  • Roberto Felici & Marcello Pagnini, 2008. "DISTANCE, BANK HETEROGENEITY AND ENTRY IN LOCAL BANKING MARKETS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 56(3), pages 500-534, September.
  • Handle: RePEc:bla:jindec:v:56:y:2008:i:3:p:500-534

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    References listed on IDEAS

    1. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    2. Richard Blundell & Stephen Bond, 2000. "GMM Estimation with persistent panel data: an application to production functions," Econometric Reviews, Taylor & Francis Journals, vol. 19(3), pages 321-340.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
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    Cited by:

    1. Ron Boschma & Matté Hartog, 2014. "Merger and Acquisition Activity as Driver of Spatial Clustering: The Spatial Evolution of the Dutch Banking Industry, 1850–1993," Economic Geography, Clark University, vol. 90(3), pages 247-266, July.
    2. repec:kap:sbusec:v:48:y:2017:i:3:d:10.1007_s11187-016-9794-x is not listed on IDEAS
    3. Paolo Coccorese & Giovanni Ferri, 2017. "Is Competition Among Cooperative Banks a Negative Sum Game?," CERBE Working Papers wpC19, CERBE Center for Relationship Banking and Economics.
    4. repec:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0244-3 is not listed on IDEAS
    5. Sauro Mocetti & Marcello Pagnini & Enrico Sette, 2017. "Information Technology and Banking Organization," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(3), pages 313-338, June.

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