MULTILEVEL EMPIRICS FOR SMALL BANKS IN LOCAL MARKETS

Francesco Aiello () and Graziella Bonanno

No 201503, Working Papers from Università della Calabria, Dipartimento di Economia, Statistica e Finanza "Giovanni Anania" - DESF

Abstract: Banking is increasingly a-spatial. However, the environment matters for small banks. Indeed, they are embedded in narrowed markets and hence benefit from proximity to their member-customers. By referring to multilevel approach, this article aims at measuring how much the performance of Italian mutual-cooperative banks is determined by both geographical (provincial level) and individual characteristics (small bank level). The effect of local markets explains 28.27% of bank heterogeneity in the empty multilevel model and 33% in the most extended model. Moreover, it is found that bank efficiency increases with market concentration and demand density and decreases with branching in local markets.

Keywords: Multilevel model; mutual-cooperative banks; local markets; cost efficiency (search for similar items in EconPapers)
JEL-codes: C13 D00 G21 R19 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2015-05
New Economics Papers: this item is included in nep-ban, nep-cse, nep-eff, nep-geo and nep-ure
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http://www.ecostat.unical.it/RePEc/WorkingPapers/WP03_2015.pdf First version, 2015-05 (application/pdf)

Related works:
Journal Article: Multilevel empirics for small banks in local markets (2018)
Working Paper: MULTILEVEL EMPIRICS FOR SMALL BANKS IN LOCAL MARKETS (2016)
Working Paper: Multilevel empirics for small banks in local markets (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:clb:wpaper:201503

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