Journal ArticleDOI
Do Substantial Horizontal Mergers Generate Significant Price Effects? Evidence From The Banking Industry
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In this paper, the authors examined the price effects of recent US bank mergers that substantially increased local market concentration using the deposit interest rates that banks offer their customers as their price measure, and they found that, over the 1991-94 time period, deposit rates offered by participants in substantial horizontal mergers and their local market rivals declined by a greater percentage than did deposit rate offered by banks not operating in markets in which such mergers took place.Abstract:
This study examines the price effects of recent US bank mergers that substantially increased local market concentration. Using the deposit interest rates that banks offer their customers as our price measure, we find that, over the 1991–94 time period, deposit rates offered by participants in substantial horizontal mergers and their local market rivals declined by a greater percentage than did deposit rates offered by banks not operating in markets in which such mergers took place. We interpret our results as evidence that these mergers led to increased market power.read more
Citations
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Journal ArticleDOI
The consolidation of the financial services industry: Causes, consequences, and implications for the future
TL;DR: In this article, a framework for evaluating the causes, consequences, and future implications of financial services industry consolidation is proposed, and a review of the extant research literature within the context of this framework is provided.
ReportDOI
Regulations, Market Structure, Institutions, and the Cost of Financial Intermediation
TL;DR: This article examined the impact of bank regulations, market structure, and national institutions on bank net interest margins and overhead costs using data on over 1400 banks across 72 countries while controlling for banks specific characteristics.
Journal ArticleDOI
The Effects of Megamergers on Efficiency and Prices: Evidence from a Bank Profit Function
TL;DR: This paper examined the efficiency and price effects of mergers by applying a frontier profit function to data on bank "megamergers" and found that merged banks experience a statistically significant 16 percentage point average increase in profit efficiency rank relative to other large banks.
Book
Globalization of Financial Institutions: Evidence from Cross-Border Banking Performance
TL;DR: In this article, the causes, consequences, and implications of cross-border consolidation of financial institutions by reviewing several hundred studies, providing comparative international data, and estimating cross-bank efficiency in France, Germany, Spain, the U.K., and the United States during the 1990s.
Posted Content
Vive La Resistance: Competing Logics and the Consolidation of U.S. Community Banking
TL;DR: In this article, the authors investigate how competing logics facilitate resistance to institutional change, focusing on banking professionals' resistance to large, national banks' acquisitions of smaller, local banks, and argue that these efforts to introduce a banking logic emphasizing efficiencies of geographic diversification triggered new forms of professional entrepreneurialism intended to preserve a community logic of banking.
References
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Journal ArticleDOI
A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity
TL;DR: In this article, a parameter covariance matrix estimator which is consistent even when the disturbances of a linear regression model are heteroskedastic is presented, which does not depend on a formal model of the structure of the heteroSkewedness.
The behavior of maximum likelihood estimates under nonstandard conditions
TL;DR: In this paper, the authors prove consistency and asymptotic normality of maximum likelihood estimators under weaker conditions than usual, such that the true distribution underlying the observations belongs to the parametric family defining the estimator, and the regularity conditions do not involve the second and higher derivatives of the likelihood function.
Posted Content
Regression standard errors in clustered samples
TL;DR: In this paper, the residuals are sorted and the observation is located in the residual corresponding to the quantile in question, taking into account weights if they are applied, and the square root of the sum of the weights is calculated.
Journal ArticleDOI
The Price-Concentration Relationship in Banking
TL;DR: In this article, the authors examined the price-concentration relationship instead of the profit concentration relationship and found that the results strongly support the structure-performance hypothesis and are robust with respect to model specification, measurement of concentration, and econometric technique.
Journal ArticleDOI
The Effects of Megamergers on Efficiency and Prices: Evidence from a Bank Profit Function
TL;DR: This paper examined the efficiency and price effects of mergers by applying a frontier profit function to data on bank "megamergers" and found that merged banks experience a statistically significant 16 percentage point average increase in profit efficiency rank relative to other large banks.