The multimarket contacts theory; an application to Italian banks
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, banksï¿½ costs and loan growth on variations in market shares and interest rates. No support is found for the multimarket contact hypothesis. Geographical overlap in banking is positively correlated with changes in market shares, confirming the thesis of an overall increase in competition within the Italian banking system. Greater multimarket links also seem to correspond to lower lending rates.
|Date of creation:||Dec 2000|
|Contact details of provider:|| Postal: Via Nazionale, 91 - 00184 Roma|
Web page: http://www.bancaditalia.it
More information through EDIRC
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.:
- van Witteloostuijn, Arjen & van Wegberg, Marc, 1992. "Multimarket competition : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 18(2), pages 273-282, July.
When requesting a correction, please mention this item's handle: RePEc:bdi:wptemi:td_387_00. 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: ()
If references are entirely missing, you can add them using this form.