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Regional Bank Consolidations contribute to cost reduction: Evidence from Japan

Author

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  • Yoshiaki Ogura

    (Waseda University)

Abstract

We investigate the effect of regional bank mergers in Japan since the 2000s by applying the DID-event study design. From the estimation we find the following tendency. First, any type of merger reduces costs. Second, no competition reduction effects are found both in loan markets and deposit markets in any type of merger. Third, the cost reduction effect is passed through to users by reducing borrowing costs in any type of merger. Fourth, the cost reduction effect is larger in full-spec mergers than BHC establishments. These findings imply that the regional bank consolidations in Japan reduced operating costs of the regional banking sector without reducing competition. This implies that the regional bank consolidations were beneficial mainly for users.

Suggested Citation

  • Yoshiaki Ogura, 2026. "Regional Bank Consolidations contribute to cost reduction: Evidence from Japan," Working Papers 2533, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2533
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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
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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