Arbeitspapier

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.

Language
Englisch

Bibliographic citation
Series: Nota di Lavoro ; No. 2010,95

Classification
Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Oligopoly and Other Imperfect Markets
Regulation and Industrial Policy: Other
Subject
Banking Industry
Competition and Market Structure
Merger Policy

Event
Geistige Schöpfung
(who)
Cerasi, Vittoria
Chizzolini, Barbara
Ivaldi, Marc
Event
Veröffentlichung
(who)
Fondazione Eni Enrico Mattei (FEEM)
(where)
Milano
(when)
2010

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Cerasi, Vittoria
  • Chizzolini, Barbara
  • Ivaldi, Marc
  • Fondazione Eni Enrico Mattei (FEEM)

Time of origin

  • 2010

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