Regulatory Competition and Cross-Fertilization in the US Banking Markets

Tirtiroglu, Dogan; Tanyeri, Başak; Tirtiroglu, Ercan; Daniels, Kenneth N.

doi:10.2139/ssrn.2441279

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Regulatory Competition and Cross-Fertilization in the US Banking Markets

41 Pages Posted: 23 May 2014

See all articles by Dogan Tirtiroglu

Ercan Tirtiroglu

University of Adelaide - Business School

Kenneth N. Daniels

Daniels Foundation for Impact Investments and Development

Date Written: May 23, 2014

Abstract

We examine empirically cross-fertilization in the productivity growth of banks between a state and its neighboring and non-neighboring states before (1971-1977) and during (1982-1995) the interstate multibank holding company (IMBHC) deregulations, upon which, cross-border bank M&As, mainly among neighboring states, could enhance cross-fertilization by injecting new blood and awakening the market for corporate control. Results show that cross-fertilization in bank performance, observed among neighboring states during 1971-1977, gets stronger during 1982-1995.

Keywords: Bank deregulations, Commercial Banks, Contestability, Spatial Interaction, Tiebout Model, Productivity Growth, Kalman Filter

JEL Classification: G21, G28, G34, K23, D24, C23, R12

Suggested Citation: Suggested Citation

Tirtiroglu, Dogan and Tanyeri, Başak and Tirtiroglu, Ercan and Daniels, Kenneth N., Regulatory Competition and Cross-Fertilization in the US Banking Markets (May 23, 2014). Available at SSRN: https://ssrn.com/abstract=2441279 or http://dx.doi.org/10.2139/ssrn.2441279