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A Bayesian Perspective to Analyze Branch Location Patterns in Spanish Banking

Luisa Alamá Sabater (), David Conesa Guillén (), Anabel Forte Deltell () and Emili Tortosa-Ausina ()
Additional contact information
Luisa Alamá Sabater: Jaume I Universtity
David Conesa Guillén: University of Valencia
Anabel Forte Deltell: Jaume I University

No 2013127, Working Papers from Fundacion BBVA / BBVA Foundation

Abstract: We analyze the determinants of bank branch location in Spain controlling for geography explicitly. After a long period of intense expansion, most savings banks are now involved in merger processes. However, given the contributions of this type of bank to combatting financial exclusion, this process might exacerbate the consequences of the crisis for some social groups. Related problems such as new banking regulation initiatives, or the current excess capacity in the sector, add further relevance to this problem. We address the issue from a Bayesian spatial perspective, which has several advantages over other methodologies used in previous studies. Specifically, the techniques we choose allow us to assess with some precision whether over-branching or under-branching have taken place. Results suggest that both phenomena exist in the Spanish banking sector, although implications for the three types of banks in the industry (commercial banks, savings banks, credit unions) differ.

Keywords: Bank; Bayesian statistics; branch; municipality. (search for similar items in EconPapers)
JEL-codes: G21 R10 C11 (search for similar items in EconPapers)
Pages: 39
Date: 2013-07
New Economics Papers: this item is included in nep-ban, nep-geo and nep-ure
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