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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 consolidations in Japan since 2005 by applying the DID-event study design. We find that i) any type of consolidations reduces operating costs on average, ii) this cost reduction effect exceeds the anti-competitive effect in any type of merger, iii) the cost reduction effect is passed through to bank users by reducing borrowing costs, and that iv) cost reduction effect is larger in full-spec mergers than BHC establishments. These findings imply 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 2614, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2614
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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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