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Multilevel Empirics For Small Banks In Local Markets

Author

Listed:
  • Francesco Aiello

  • Graziella Bonanno

    (Dipartimento di Economia, Statistica e Finanza, Università della Calabria)

Abstract

Banking is increasingly a-spatial. However, the environment matters for small banks. Indeed, they are embedded in narrowed markets and hence benefit from proximity to their member-customers. By referring to multilevel approach, this article aims at measuring how much the performance of Italian mutual-cooperative banks is determined by both geographical (provincial level) and individual characteristics (small bank level). The effect of local markets explains 28.27% of bank heterogeneity in the empty multilevel model and 33% in the most extended model. Moreover, it is found that bank efficiency increases with market concentration and demand density and decreases with branching in local markets.

Suggested Citation

  • Francesco Aiello & Graziella Bonanno, 2015. "Multilevel Empirics For Small Banks In Local Markets," Working Papers 201503, Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF.
    • Handle: RePEc:clb:wpaper:201503
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    File URL: http://www.ecostat.unical.it/RePEc/WorkingPapers/WP03_2015.pdf
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    2. Kabeya Clement Mulamba, 2022. "Relationship between households’ share of food expenditure and income across South African districts: a multilevel regression analysis," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 9(1), pages 1-11, December.
    3. Lara Abdel Fattah & Giuseppe Arcuri & Aziza Garsaa & Nadine Levratto, 2020. "Firm financial soundness and knowledge externalities: A comparative regional analysis," Papers in Regional Science, Wiley Blackwell, vol. 99(5), pages 1459-1486, October.
    4. Graziella Bonanno & Filippo Domma, 2022. "Analytical Derivations of New Specifications for Stochastic Frontiers with Applications," Mathematics, MDPI, vol. 10(20), pages 1-17, October.
    5. Johann Burgstaller, 2020. "Retail‐bank efficiency: Nonstandard goals and environmental determinants," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(2), pages 269-301, June.
    6. Floro Ernesto Caroleo & Antonella Rocca & Paolo Mazzocchi & Claudio Quintano, 2020. "Being NEET in Europe Before and After the Economic Crisis: An Analysis of the Micro and Macro Determinants," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(3), pages 991-1024, June.
    7. Carmelo Algeri & Luc Anselin & Antonio Fabio Forgione & Carlo Migliardo, 2022. "Spatial dependence in the technical efficiency of local banks," Papers in Regional Science, Wiley Blackwell, vol. 101(3), pages 685-716, June.
    8. Abdoulaye Kané & Nadine Levratto, 2025. "Heterogeneity in the productivity of French construction firms: A multilevel analysis," EconomiX Working Papers 2025-19, University of Paris Nanterre, EconomiX.
    9. Thomas J. Weinandy & Kuanchin Chen & Susan Pozo & Michael J. Ryan, 2024. "Twitter-patter: how social media drives foot traffic to retail stores," Journal of Marketing Analytics, Palgrave Macmillan, vol. 12(3), pages 551-569, September.

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    Keywords

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D00 - Microeconomics - - General - - - General
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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