Investigating the banking consolidation trend
This paper examines whether the U.S. banking industry's recent consolidation trend--toward fewer and bigger firms--is a natural result of market forces. The paper finds that it is not: The evidence does not support the popular claims that large banking firms are more efficient and less risky than smaller firms or the notion that the industry is consolidating in order to eliminate excess capacity. The paper suggests, instead, that public policies are encouraging banks to merge, although it acknowledges that other forces may be at work as well.
Volume (Year): (1991)
Issue (Month): Spr ()
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- Berger, Allen N. & Humphrey, David B., 1991.
"The dominance of inefficiencies over scale and product mix economies in banking,"
Journal of Monetary Economics,
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- Charles Brown & James L. Medoff, 1989.
"The Employer Size-Wage Effect,"
NBER Working Papers
2870, National Bureau of Economic Research, Inc.
- Steven A. Sharpe, 1990. "Switching costs, market concentration, and prices: the theory and its empirical implications in the bank deposit market," Finance and Economics Discussion Series 138, Board of Governors of the Federal Reserve System (U.S.).
- Jeffrey A. Clark, 1988. "Economies of scale and scope at depository financial institutions: a review of the literature," Economic Review, Federal Reserve Bank of Kansas City, issue Sep, pages 16-33.
- Alien, Linda & Cebenoyan, A. Sinan, 1991. "Bank acquisitions and ownership structure: Theory and evidence," Journal of Banking & Finance, Elsevier, vol. 15(2), pages 425-448, April.
- David B. Humphrey, 1990. "Why do estimates of bank scale economies differ?," Economic Review, Federal Reserve Bank of Richmond, issue Sep, pages 38-50.
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