Local Market Structure and Bank Competition: evidence from the Brazilian auto loan market

Bruno Martins ()

No 299, Working Papers Series from Central Bank of Brazil, Research Department

Abstract: Asymmetric information and transportation costs incurred by borrowers may raise spatial price discrimination in bank lending. This paper exploits the large geographic dispersion in the market structure of the Brazilian banking sector to investigate the relationship between market concentration and bank competition. Local markets are also distinguished by the degree of barrier to entry in order to assess its effect on bank competitive behavior. The findings indicate a negative correlation between market concentration and bank competition and an even stronger effect in locations where the barriers to entry are higher. The paper also highlights the importance of evaluating the geographic impact of mergers and acquisitions for the analysis of the effect of market concentration on bank competition.

Date: 2012-11
New Economics Papers: this item is included in nep-ban, nep-com and nep-geo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.bcb.gov.br/content/publicacoes/WorkingPaperSeries/wps299.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bcb:wpaper:299

Access Statistics for this paper

More papers in Working Papers Series from Central Bank of Brazil, Research Department
Bibliographic data for series maintained by Rodrigo Barbone Gonzalez ().