When for-profits and not-for-profits compete: theory and empirical evidence from retail banking

William Emmons and Frank A. Schmid

No 2004-004, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We model competition in local deposit markets between for-profit and not-for-profit financial institutions. For-profit retail banks may offer a superior bundle of financial services, but not-for-profit (occupational) credit unions enjoy sponsor subsidies that allow them to capture a share of the local market. The model predicts that greater participation in credit unions in a given county will be associated with higher levels of retail-bank concentration. We find empirical evidence of this association. The ability of credit unions to affect local banking market structure supports the presumption of current banking antitrust analysis that retail banking markets remain local. We identify local economic factors that modulate the nature of competition between banks and credit unions, including income per capita and population density.

Keywords: Banks; and; banking (search for similar items in EconPapers)
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://s3.amazonaws.com/real.stlouisfed.org/wp/2004/2004-004.pdf Full text (application/pdf)

Related works:
Working Paper: When for-profits and not-for-profits compete: theory and empirical evidence from retail banking (2004)
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:fip:fedlwp:2004-004

Ordering information: This working paper can be ordered from

DOI: 10.20955/wp.2004.004

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Scott St. Louis ().