Abstract

http://ssrn.com/abstract=1641305
 
 

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Counterfactual Analysis of Bank Mergers


Pedro P. Barros


Universidade Nova de Lisboa

Diana Bonfim


Banco de Portugal

Moshe Kim


University of Haifa - Department of Economics; Universitat Pompeu Fabra - Faculty of Economic and Business Sciences

Nuno C. Martins


Bank of Portugal; Universidade Nova de Lisboa

July 16, 2010

Empirical Economics, Vol. 46, No. 1, 2014

Abstract:     
Estimating the impact of bank mergers requires a framework distinguishing endogenous changes in market structure and conduct from exogenous changes. Conventionally, the literature relies on differential analysis, considering market structure as exogenous by using concentration indexes such as the HHI. We introduce an econometric methodology relying on a structural model of the credit market from which we derive a counterfactual scenario of what would have happened if mergers had not occurred. We find that mergers increased firms' access to credit, but had an opposite effect on households. Moreover, we find that mergers led to a widespread decrease in interest rates.

Number of Pages in PDF File: 41

Keywords: banks, mergers, competition

JEL Classification: G21, G34, L10

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Date posted: July 24, 2010 ; Last revised: October 21, 2014

Suggested Citation

Barros, Pedro P. and Bonfim, Diana and Kim, Moshe and Martins, Nuno C., Counterfactual Analysis of Bank Mergers (July 16, 2010). Empirical Economics, Vol. 46, No. 1, 2014. Available at SSRN: http://ssrn.com/abstract=1641305 or http://dx.doi.org/10.2139/ssrn.1641305

Contact Information

Pedro Luis Pita Barros
Universidade Nova de Lisboa ( email )
Campus de Campolide
Lisboa, 1099-032
Portugal
+351 21 383 3624 (Phone)
+351 21 388 6073 (Fax)
HOME PAGE: http://ppbarros.fe.unl.pt
Diana Bonfim (Contact Author)
Banco de Portugal ( email )
Av Almirante Reis, 71
P-1150-012 Lisboa
Portugal
Moshe Kim
University of Haifa - Department of Economics ( email )
Haifa 31905
Israel
(972) 4 8240115 (Phone)
(972)4-8240059 (Fax)
Universitat Pompeu Fabra - Faculty of Economic and Business Sciences ( email )
Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
Nuno C. Martins
Bank of Portugal ( email )
Avenida Almirante Reis 71
Lisbon 1150-012
Portugal
(351) 213130938 (Phone)
Universidade Nova de Lisboa
Lisbon
Portugal
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