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Competitive collaboration & market contestability: Cases in Mexican & UK banking (1945-1975)

Bernardo Batiz-Lazo and Gustavo Del Angel

Economic History from University Library of Munich, Germany

Abstract: This research explores the evolution of co-operation among different types of intermediaries in the UK and Mexican financial systems and provides an international comparison. In it we focus on how and why collaboration between commercial banks and non-bank financial competitors emerged in the context of the external innovations that modified the contestability of bank markets. Changes in Mexican banking consider collaboration between commercial banks and small regional banks, with an emphasis on the 1945 to 1975 period. The success of collaboration, between non-bank and non-finance providers to modify competitive capabilities and competitive challenges, in UK deposit markets is the benchmark for co-operation in Mexican banking. Business histories in the UK and Mexico show how some relations emerged out of integration strategies, with the purpose of establishing financial conglomerates. Other banks and non-bank providers in Mexico and the UK sought to create co-operative agreements that developed competitive capabilities and allowed barriers to enter deposit markets to be circumvented. As a result, the research sheds light on the success of collaboration agreements through changes in competitive strength rather than the longevity of the transaction or the formality and structural visibility of the agreements.

Keywords: Comparative Financial Markets (N20); Market Structure (L10); Networks (L22). (search for similar items in EconPapers)
JEL-codes: N20 L10 L22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com and nep-ind
Date: 2002-11-10
Note: Type of Document - pdf; to print on HP/PostScript/Franciscan monk
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