The determinants of net interest income in the Mexican banking system: An integrated model
This paper analyzes net interest income in the Mexican banking system over the period 1993-2005. Taking as reference the seminal work by Ho and Saunders [Ho, T., Saunders, A., 1981. The determinants of banks interest margins: theory and empirical evidence. Journal of Financial and Quantitative Analysis XVI (4), 581-600] and subsequent extensions by other authors, our study models the net interest margin simultaneously including operating costs and diversification and specialization as determinants of the margin. The results referring to the Mexican case show that its high margins can be explained mainly by average operating costs and by market power. Although non-interest income has increased in recent years, its economic impact is low.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bun, Maurice J. G. & Kiviet, Jan F., 2003.
"On the diminishing returns of higher-order terms in asymptotic expansions of bias,"
Elsevier, vol. 79(2), pages 145-152, May.
- Maurice J.G. Bun & Jan F. Kiviet, 2002. "On the Diminishing Returns of Higher-order Terms in Asymptotic Expansions of Bias," Tinbergen Institute Discussion Papers 02-099/4, Tinbergen Institute, revised 24 Oct 2002.
- Bruno, Giovanni S.F., 2005.
"Approximating the bias of the LSDV estimator for dynamic unbalanced panel data models,"
Elsevier, vol. 87(3), pages 361-366, June.
- Giovanni S.F. Bruno, 2004. "Approximating the Bias of the LSDV Estimator for Dynamic Unbalanced Panel Data Models," KITeS Working Papers 159, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2004.
- Angbazo, Lazarus, 1997. "Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking," Journal of Banking & Finance, Elsevier, vol. 21(1), pages 55-87, January.
- Demirguc, Asli & Huizinga, Harry, 1999.
"Determinants of Commercial Bank Interest Margins and Profitability: Some International Evidence,"
World Bank Economic Review,
World Bank Group, vol. 13(2), pages 379-408, May.
- Demirguc-Kunt, Asli & Huizinga, Harry, 1998. "Determinants of commercial bank interest margins and profitability : some international evidence," Policy Research Working Paper Series 1900, The World Bank.
- Martinez Peria, Maria Soledad & Mody, Ashoka, 2004.
"How Foreign Participation and Market Concentration Impact Bank Spreads: Evidence from Latin America,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 36(3), pages 511-37, June.
- Maria Soledad Martinez Peria & Ashoka Mody, 2004. "How foreign participation and market concentration impact bank spreads: evidence from Latin America," Proceedings, Federal Reserve Bank of Cleveland, pages 511-542.
- Martinez Peria, Maria Soledad & Mody, Ashoka, 2004. "How foreign participation and market concentration impact bank spreads : evidence from Latin America," Policy Research Working Paper Series 3210, The World Bank.
- Blundell, R. & Bond, S., 1995.
"Initial Conditions and Moment Restrictions in Dynamic Panel Data Models,"
104, Economics Group, Nuffield College, University of Oxford.
- 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.
- R Blundell & Steven Bond, "undated". "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, "undated". "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Claeys, Sophie & Vander Vennet, Rudi, 2008. "Determinants of bank interest margins in Central and Eastern Europe: A comparison with the West," Economic Systems, Elsevier, vol. 32(2), pages 197-216, June.
- David Roodman, 2007.
"A Note on the Theme of Too Many Instruments,"
125, Center for Global Development.
- Avalos, Marcos & Hernández Trillo, Fausto, 2006.
"Competencia bancaria en México,"
Estudios y Perspectivas – Sede Subregional de la CEPAL en México
62, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
- R. G Gelos, 2006.
"Banking Spreads in Latin America,"
IMF Working Papers
06/44, International Monetary Fund.
- Saunders, Anthony & Schumacher, Liliana, 2000. "The determinants of bank interest rate margins: an international study," Journal of International Money and Finance, Elsevier, vol. 19(6), pages 813-832, December.
- Hayakawa, Kazuhiko, 2007.
"Small sample bias properties of the system GMM estimator in dynamic panel data models,"
Elsevier, vol. 95(1), pages 32-38, April.
- Kazuhiko Hayakawa, 2005. "Small Sample Bias Propreties of the System GMM Estimator in Dynamic Panel Data Models," Hi-Stat Discussion Paper Series d05-82, Institute of Economic Research, Hitotsubashi University.
- Maudos, Joaquin & Fernandez de Guevara, Juan, 2003.
"Factors Explaining the Interest Margin in the Banking Sectors of the European Union,"
15252, University Library of Munich, Germany.
- Maudos, Joaquin & Fernandez de Guevara, Juan, 2004. "Factors explaining the interest margin in the banking sectors of the European Union," Journal of Banking & Finance, Elsevier, vol. 28(9), pages 2259-2281, September.
- Lepetit, Laetitia & Nys, Emmanuelle & Rous, Philippe & Tarazi, Amine, 2008.
"The expansion of services in European banking: Implications for loan pricing and interest margins,"
Journal of Banking & Finance,
Elsevier, vol. 32(11), pages 2325-2335, November.
- Laetitia Lepetit & Emmanuelle Nys & Philippe Rous & Amine Tarazi, 2008. "The expansion of services in European banking: implications for loan pricing and interest margins," Post-Print hal-01098958, HAL.
- Laetitia Lepetit & Emmanuelle Nys & Philippe Rous & Amine Tarazi, 2008. "The expansion of services in European banking: Implications for loan pricing and interest margins," Post-Print hal-00844822, HAL.
- Ho, Thomas S. Y. & Saunders, Anthony, 1981. "The Determinants of Bank Interest Margins: Theory and Empirical Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 16(04), pages 581-600, November.
- Solís, Liliana & Maudos, Joaquín, 2008. "The social costs of bank market power: Evidence from Mexico," Journal of Comparative Economics, Elsevier, vol. 36(3), pages 467-488, September.
- Allen, Linda, 1988. "The Determinants of Bank Interest Margins: A Note," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 23(02), pages 231-235, June.
- Kiviet, Jan F., 1995.
"On bias, inconsistency, and efficiency of various estimators in dynamic panel data models,"
Journal of Econometrics,
Elsevier, vol. 68(1), pages 53-78, July.
- Tom Doan, "undated". "LSDVC: RATS procedure to estimate a dynamic FE model with correction for bias," Statistical Software Components RTS00111, Boston College Department of Economics.
- Liliana Solís & Joaquín Maudos Villarroya, 2007.
"Deregulation, Liberalization And Consolidation Of The Mexican Banking System: Effects On Competition,"
Working Papers. Serie EC
2007-13, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Maudos, Joaquín & Solís, Liliana, 2011. "Deregulation, liberalization and consolidation of the Mexican banking system: Effects on competition," Journal of International Money and Finance, Elsevier, vol. 30(2), pages 337-353, March.
- Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
- M Arellano & O Bover, 1990.
"Another Look at the Instrumental Variable Estimation of Error-Components Models,"
CEP Discussion Papers
dp0007, Centre for Economic Performance, LSE.
- Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
- Brock, Philip L. & Rojas Suarez, Liliana, 2000. "Understanding the behavior of bank spreads in Latin America," Journal of Development Economics, Elsevier, vol. 63(1), pages 113-134, October.
- Rubén Hernández-Murillo, 2007. "Experiments in financial liberalization: the Mexican banking sector," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 415-432.
When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:33:y:2009:i:10:p:1920-1931. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.