Regional Bank Consolidations Contribute to Cost Reduction: Evidence from Japan

Yoshiaki Ogura
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Yoshiaki Ogura: Waseda University

No 2614, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: We investigate the effect of regional bank consolidations in Japan since 2005 by applying the DID-event study design. We find that i) any type of consolidations reduces operating costs on average, ii) this cost reduction effect exceeds the anti-competitive effect in any type of merger, iii) the cost reduction effect is passed through to bank users by reducing borrowing costs, and that iv) cost reduction effect is larger in full-spec mergers than BHC establishments. These findings imply that the regional bank consolidations were beneficial mainly for users.

Keywords: regional banks; bank consolidations; bank holding companies (search for similar items in EconPapers)
JEL-codes: G21 G34 L22 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2026-09
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