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Information Technology and Long Term Trend of Financial Services Supply

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  • Alexandre Rands

    (Datamétrica Consultoria, Pesquisa e Telemarketing)

Abstract

There are two observed trends in the structure of financial institutions. The first one is consolidation, which leads to inter-firm concentration, and the second one is the regional dispersion of their output. Both phenomena are often seen as consequences of development in the technology of information. This paper studies this relationship, theoretically and empirically, and shows that the likely impact of such development actually leads to regional dispersion, as seen in the data, and also to reduction of inter-firm concentration. The major determinant for this impact is the market power of firms. Although there is not sufficient data to generate any strong conclusion, empirical results support the theoretical hypothesis, forwarded by the model presented in the paper.

Suggested Citation

  • Alexandre Rands, 2004. "Information Technology and Long Term Trend of Financial Services Supply," Working Papers 9, Datamétrica Consultoria Econômica, revised 2004.
    • Handle: RePEc:dtm:wpaper:9
    as

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    References listed on IDEAS

    as
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    5. Berger, Allen N. & Demsetz, Rebecca S. & Strahan, Philip E., 1999. "The consolidation of the financial services industry: Causes, consequences, and implications for the future," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 135-194, February.
    6. Allen Berger, 2000. "The Integration of the Financial Services Industry," North American Actuarial Journal, Taylor & Francis Journals, vol. 4(3), pages 25-45.
    7. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
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    Full references (including those not matched with items on IDEAS)

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