English, Article, Journal or magazine article edition: Entry Restrictions, Industry Evolution and Dynamic Efficiency: Evidence from Commercial Banking Jith Jayaratne; Philip E. Strahan

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Bookmark: http://trove.nla.gov.au/version/190614
Physical Description
  • preprint
Language
  • English

Edition details

Title
  • Entry restrictions, industry evolution and dynamic efficiency: evidence from commercial banking
Author
  • Jith Jayaratne
  • Philip E. Strahan
Physical Description
  • preprint
Notes
  • This paper shows that bank performance improves significantly after restrictions on bank expansion are lifted. We find that operating costs and loan losses decrease sharply after states permit statewide branching, and--to a lesser extent--after states allow interstate banking. The improvements following branching deregulation appear to occur because better banks grow at the expense of their less efficient rivals. By retarding the "natural" evolution of the industry, branching restrictions reduced the performance of the average banking asset. We also find that most of the reduction in banks' costs were passed along to bank borrowers in the form of lower loan rates.
  • RePEc:wop:pennin:97-30
  • This paper shows that bank performance improves significantly after restrictions on bank expansion are lifted. We find that operating costs and loan losses decrease sharply after states permit statewide branching and, to a lesser extent, after states allow interstate banking. The improvements following branching deregulation appear to occur because better banks grow at the expense of their less-efficient rivals. By retarding the "natural" evolution of the industry, branching restrictions reduce the performance of the average banking asset. We also find that most of the reduction in banks' costs are passed along to bank borrowers in the form of lower loan rates.
  • Bank competition ; Banking law ; Branch banks ; Interstate banking
  • RePEc:fip:fednsr:22
  • This paper shows that bank performance improves significantly after restrictions on bank expansion are lifted. We find that profits increase and loan quality improves after states permit statewide branching, and--to a lesser extent--after states allow interstate banking. The improvements following branching deregulation appear to occur because better banks increase market share at the expense of their less efficient rivals. By retarding the "natural" evolution of the industry, branching restrictions reduced the performance of the average banking asset. We also find limited support for the hypothesis that more competitive banking markets following deregulation better discipline bank managers, thereby improving bank performance.
  • Bank competition ; Bank management ; Branch banks ; Commercial loans
  • RePEc:fip:fednrp:9630
Language
  • English
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