Spatial competition and market power in banking
| Autor: | Albert Kagan, Ram N. Acharya, Timothy J. Richards |
|---|---|
| Rok vydání: | 2008 |
| Předmět: |
Economics and Econometrics
business.industry Monetary economics Economic surplus General Business Management and Accounting Location theory Supply and demand Competition (economics) Econometric model Economics Retail banking Spatial econometrics Market power banking market power non-metropolitan markets spatial econometrics Community/Rural/Urban Development Financial Economics C21 D43 G21 L13 business Industrial organization |
| Zdroj: | Journal of Economics and Business. 60:436-454 |
| ISSN: | 0148-6195 |
| DOI: | 10.1016/j.jeconbus.2007.06.002 |
| Popis: | Banks in non-metropolitan areas compete in a spatially differentiated environment. Non-metro community banks have been insulated from increasing competition from metro banks due to their reliance on soft information in relationship lending. Proximity to borrowers, therefore, may be an important source of market power for non-metro community banks. This paper estimates a structural model of the supply and demand of banking services in which pricing power is allowed to depend explicitly on the distance between rival banks. A spatial autoregressive econometric model shows that approximately 38.0% of economic surplus earned by firms in non-metropolitan banking in the upper midwest is due to spatial market power. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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