The Impact of Mergers on the Degree of Competition in the Banking Industry
This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is function also of market structure indicators. We then use the econometric model to evaluate the impact of horizontal mergers among incumbent banks on competition and discuss when, depending on the pre-merger structure of the market and geographic distribution of branches, the merger is anti-competitive. The paper has implications for competition policy as it suggests an applied tool to evaluate the potential anti-competitive impact of mergers.
|Date of creation:||Jul 2010|
|Date of revision:|
|Contact details of provider:|| Postal: Corso Magenta, 63 - 20123 Milan|
Web page: http://www.feem.it/
More information through EDIRC
References listed on IDEAS
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.:
- Bresnahan, T.F & Reiss, P.C., 1989.
"Entry And Competition In Concentrated Markets,"
151, Stanford - Studies in Industry Economics.
- Boone, J. & van Ours, J.C. & van der Wiel, H.P., 2007.
"How (Not) to Measure Competition,"
2007-32, Tilburg University, Center for Economic Research.
- Boone, Jan & van der Wiel, Henry & van Ours, Jan C, 2007. "How (not) to measure competition," CEPR Discussion Papers 6275, C.E.P.R. Discussion Papers.
- Jan Boone & Henry van der Wiel & J. van Ours, 2007. "How (not) to measure competition," CPB Discussion Paper 91, CPB Netherlands Bureau for Economic Policy Analysis.
- Boone, J. & van Ours, J.C. & van der Wiel, H.P., 2007. "How (Not) to Measure Competition," Discussion Paper 2007-014, Tilburg University, Tilburg Law and Economic Center.
- Degryse, H.A. & Ongena, S., 2003.
"Distance, Lending Relationships, and Competition,"
2003-123, Tilburg University, Center for Economic Research.
- Degryse, H.A. & Ongena, S., 2002. "Distance, Lending Relationships and Competition," Discussion Paper 2002-16, Tilburg University, Center for Economic Research.
- Hans Degryse & Steven Ongena, 2002. "Distance, Lending Relationships, and Competition," CSEF Working Papers 80, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2007.
"The Cost of Banking Regulation,"
Economics Working Papers
ECO2007/43, European University Institute.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2006. "The Cost of Banking Regulation," NBER Working Papers 12501, National Bureau of Economic Research, Inc.
- Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The cost of banking regulation," Proceedings 937, Federal Reserve Bank of Chicago.
- Guiso, Luigi & Sapienza, Paola & Zingales, Luigi, 2006. "The Cost of Banking Regulation," CEPR Discussion Papers 5864, C.E.P.R. Discussion Papers.
- Catherine Schaumans & Frank Verboven, 2015.
"Entry and Competition in Differentiated Products Markets,"
The Review of Economics and Statistics,
MIT Press, vol. 97(1), pages 195-209, March.
- Schaumans, C.B.C. & Verboven, F.L., 2011. "Entry and Competition in Differentiated Products Markets," Discussion Paper 2011-049, Tilburg University, Center for Economic Research.
- Catherine SCHAUMANS & Frank VERBOVEN, 2011. "Entry and competition in differentiated products markets," Working Papers Department of Economics ces11.23, KU Leuven, Faculty of Economics and Business, Department of Economics.
- Schaumans, Catherine & Verboven, Frank, 2011. "Entry and Competition in Differentiated Products Markets," CEPR Discussion Papers 8353, C.E.P.R. Discussion Papers.
- Bresnahan, Timothy F. & Reiss, Peter C., 1991. "Empirical models of discrete games," Journal of Econometrics, Elsevier, vol. 48(1-2), pages 57-81.
- Fabio Panetta & Dario Focarelli, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Italian Market for Bank Deposits," CEIS Research Paper 10, Tor Vergata University, CEIS.
- Paola Sapienza, 2002. "The Effects of Banking Mergers on Loan Contracts," Journal of Finance, American Finance Association, vol. 57(1), pages 329-367, 02.
- Dario Focarelli & Fabio Panetta, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits," American Economic Review, American Economic Association, vol. 93(4), pages 1152-1172, September.
- Kenneth P. Brevoort & Timothy H. Hannan, 2004. "Commercial lending and distance: evidence from Community Reinvestment Act data," Finance and Economics Discussion Series 2004-24, Board of Governors of the Federal Reserve System (U.S.).
- Martin Cihak & Simon Wolfe & Klaus Schaeck, 2006. "Are More Competitive Banking Systems More Stable?," IMF Working Papers 06/143, International Monetary Fund.
- Barbara Chizzolini, 2011. "A multiperiod model of competition in retail banking," Rivista Bancaria - Minerva Bancaria, Istituto di Cultura Bancaria Francesco Parrillo, issue 3, June.
- Andrew M. Cohen & Michael J. Mazzeo, 2007. "Market Structure and Competition among Retail Depository Institutions," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 60-74, February.
When requesting a correction, please mention this item's handle: RePEc:fem:femwpa:2010.95. 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: (barbara racah)
If references are entirely missing, you can add them using this form.