Entry restrictions, industry evolution, and dynamic efficiency
Subtitle: evidence from commercial banking
By: Jith Jayaratne and Philip E. Strahan.
Contributors: Strahan, Philip E. 1963-; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 22; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 22.
Publisher: Federal Reserve Bank of New York
Published: 1997
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Banks and banking -- Mathematical models.; Barriers to entry (Industrial organization) -- Mathematical models.
Description: "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"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/31/2005.
Also available in print.
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Mode of access: World Wide Web.