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Multimarket spatial competition in the Colombian deposit market

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  • Dairo Estrada
  • Sandra Rozo

Abstract

This paper presents a multimarket spatial competition oligopoly model for the Colombian deposit market, in line with the New Em- pirical Industrial Organization (NEIO) approach. In this framework, banks use price and non-price strategies to compete in the market, which allows us to analyze the country and the regional competitive- ness level. The theoretical model is applied to quarterly Colombian data that covers the period between 1996 and 2005. Our results sug- gest that, although the country deposit market appears to be more competitive than the Nash equilibrium, there are some local areas within the country that present evidence of market power.

Suggested Citation

  • Dairo Estrada & Sandra Rozo, 2006. "Multimarket spatial competition in the Colombian deposit market," BORRADORES DE ECONOMIA 003264, BANCO DE LA REPÚBLICA.
  • Handle: RePEc:col:000094:003264
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    References listed on IDEAS

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    Cited by:

    1. Sandra Rozo & Dairo Estrada, 2006. "Competencia espacial en el mercado colombiano de depósitos," Temas de Estabilidad Financiera 020, Banco de la Republica de Colombia.
    2. Andrés Murcia Pabón, 2007. "Determinantes del acceso al crédito de los hogares colombianos," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República - ESPE, vol. 25(55), pages 40-83, December.
    3. Temesvary, Judit, 2015. "Dynamic branching and interest rate competition of commercial banks: Evidence from Hungary," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 98-110.
    4. Laura Marcela Capera Romero, 2021. "The Effects of Usury Ceilings on Consumers Welfare: Evidence from the Microcredit Market in Colombia," Tinbergen Institute Discussion Papers 21-055/IV, Tinbergen Institute.

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    More about this item

    Keywords

    Banking; Location; Competition; Colombia.;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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