Estimating the intensity of price and non-price competition in banking

Santiago Carbo Valverde, Juan Fernández de Guevara y Rodoselovics, David Humphrey and Joaquin Maudos ()

MPRA Paper from University Library of Munich, Germany

Abstract: We model bank oligopoly behaviour using price and non-price competition as strategic variables in an expanded conjectural variations framework. Rivals can respond to changes in both loan and deposit market prices as well as (non-price) branch market shares. The model is illustrated using data for Spain which, over 1986-2002, eliminated interest rate and branching restrictions and set off a competitive race to lock-in expanded market shares. Banks use both interest rates and branches as strategic variables and both have changed over time. We illustrate the results using a regional vs. a national specification for the relevant markets.

Keywords: non-price competition; banking; market shares (search for similar items in EconPapers)
JEL-codes: D43 G21 L13 (search for similar items in EconPapers)
Date: 2009, Revised 2009
New Economics Papers: this item is included in nep-ban, nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:17612

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