This paper measures the changes in branching behaviour and competitiveness of Italian banks between 1989 and 1995 after branching deregulation. An econometric test is derived from a theoretical model of monopolistic competition for banks in order to predict branching behaviour. We find evidence that the cost of opening branches has reduced. Although the implementation of Testo Unico Bancario has affected positively the competitiveness of Italian banks, overall the degree of competition in each local market has not increased. We derive also a ranking of regional banking markets in terms of competitiveness, branching opportunity costs and profitability in line with stylised facts.
Cerasi, V., Chizzolini, B., Ivaldi, M. (2000). L'apertura di sportelli e la concorrenza nel settore bancario italiano. In Industria bancaria e concorrenza (pp. 499-522). IL MULINO.
L'apertura di sportelli e la concorrenza nel settore bancario italiano
CERASI, VITTORIA;
2000
Abstract
This paper measures the changes in branching behaviour and competitiveness of Italian banks between 1989 and 1995 after branching deregulation. An econometric test is derived from a theoretical model of monopolistic competition for banks in order to predict branching behaviour. We find evidence that the cost of opening branches has reduced. Although the implementation of Testo Unico Bancario has affected positively the competitiveness of Italian banks, overall the degree of competition in each local market has not increased. We derive also a ranking of regional banking markets in terms of competitiveness, branching opportunity costs and profitability in line with stylised facts.
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