Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

A Member of the Law Professor Blogs Network

Thursday, January 7, 2010

The Impact of Mergers on the Degree of Competition in the Banking Industry

Posted by D. Daniel Sokol

Barbara Chizzolini, Bocconi University, Vittoria Cerasi, Milano-Bicocca University - Department of Statistics, and Marc Ivaldi, University of Toulouse 1 - Industrial Economic Institute explain The Impact of Mergers on the Degree of Competition in the Banking Industry.

ABSTRACT: 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.

http://lawprofessors.typepad.com/antitrustprof_blog/2010/01/the-impact-of-mergers-on-the-degree-of-competition-in-the-banking-industry.html

| Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef012876a98b0d970c

Listed below are links to weblogs that reference The Impact of Mergers on the Degree of Competition in the Banking Industry:

Comments

Post a comment