Are Public Banks pro-Competitive? Evidence from Concentrated Local Markets in Brazil

Arbeitspapier

We measure the competitive effect of public ownership of banks in concentrated local banking markets in Brazil by extending Bresnahan and Reiss’s [1991] framework to measure the effects of entry in concentrated markets. We use variation in market size, the number of competitors and their identity to infer how conduct is affected by the entry of a private vis-à-vis a public bank. We find that, while local markets whose structure is private bank duopoly are 100% larger than private monopolies, duopolies with one public and one private bank and private monopolies are no different with respect to market size. These results suggest that, while the presence of private banks toughens competition, public banks do not affect conduct.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Texto para discussão ; No. 551

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Firm Strategy, and Market Performance: General ; Oligopoly and Other Imperfect Markets ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
• Subject: banking industry ; public versus private ownership ; effect of entry. ; Öffentliche Bank ; Regionaler Finanzsektor ; Wettbewerb ; Brasilien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Coelho, Christiano A. ; de Mello, João Manoel Pinho ; Rezende, Leonardo
• Event: Veröffentlichung
• (who): Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia
• (where): Rio de Janeiro
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/176034
• Last update: 10.03.2025, 11:42 AM CET