Author : Allen N. Berger
Publisher :
ISBN 13 :
Total Pages : 37 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis The Effects of Competition from Large, Multimarket Firms on the Performance of Small, Single-Market Firms by : Allen N. Berger
Download or read book The Effects of Competition from Large, Multimarket Firms on the Performance of Small, Single-Market Firms written by Allen N. Berger and published by . This book was released on 2008 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: We offer and test two competing hypotheses for the consolidation trend in banking using U.S. banking industry data over the period 1982-2000. Under the efficiency hypothesis, technological progress improved the performance of large, multimarket firms relative to small, single-market firms, whereas under the hubris hypothesis, consolidation was largely driven by corporate hubris. Our results are consistent with an empirical dominance of the efficiency hypothesis over the hubris hypothesis on net, technological progress allowed large, multimarket banks to compete more effectively against small, single-market banks in the 1990s than in the 1980s. We also isolate the extent to which technological progress occurred through scale versus geographic effects and how they affected the performance of small, single-market banks through revenues versus costs. The results may shedlight as well on some of the research and policy issues related to community banking, and on the question of how community banks should be defined.