Estimating the intensity of price and non-price competition in banking: an application to the Spanish case

Santiago Carbo Valverde, Juan Fernández de Guevara Radoselovics (), David Humphrey () and Joaquin Maudos ()
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Juan Fernández de Guevara Radoselovics: University of Valencia; Ivie
David Humphrey: FLORIDASTATE UNIVERSITY
Authors registered in the RePEc Author Service: Juan Fernández-de-Guevara ()

No 201023, Working Papers from Fundacion BBVA / BBVA Foundation

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)
Pages: 42
Date: 2005-04
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Citations: View citations in EconPapers (6)

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Working Paper: Estimating the intensity of price and non-price competition in banking: an application to the Spanish case (2005)
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