Interlocking Directorates and Competition in Banking
Guglielmo Barone (),
Fabiano Schivardi () and
No 2011, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)
We study the effects on loan rates of a quasi-experimental change in the Italian legislation which forbids interlocking directorates between banks. We use a difference-in-differences approach and exploit multiple banking relationships to control for unobserved heterogeneity. We find that the reform decreased rates charged by previously interlocked banks to common customers by between 10-30 basis points. The effect is stronger if the firm had a weaker bargaining power vis-a-vis the interlocked banks. Consistent with the assumption that interlocking directorates facilitate collusion, interest rates on loans from interlocked banks become more dispersed after the reform.
Pages: 29 pages
Date: 2020, Revised 2020-05
New Economics Papers: this item is included in nep-ban, nep-com and nep-eff
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Working Paper: Interlocking Directorates and Competition in Banking (2022)
Working Paper: Interlocking Directorates and Competition in Banking (2020)
Working Paper: Interlocking Directorates and Competition in Banking* (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:2011
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