The Many Facets of Bank Competition: Evidence from An Extraordinary Dataset

48 Pages Posted: 9 Feb 2022 Last revised: 1 Aug 2022

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business

Troy A. Kravitz

FDIC, Division of Insurance and Research

Lynn Shibut

affiliation not provided to SSRN

Date Written: February 9, 2022

Abstract

We comprehensively test and compare five facets of bank competition using over 800,000 deposit
accounts from 500+ banks covering two decades. We center markets on depositors’ locations to
reflect customers’ perspectives, rather than banks as in most competition re- search. Results
include that the financial health of banks and their rivals influence deposit pricing more than
traditional market competition measures; relationships harm, rather than help, depositors; and
competition from large banks and credit unions strengthen, rather than weaken, community banks
relative to their depositors. Additional investigation finds no substantial role of customer
inertia from relationships, implying future research may be warranted.

Keywords: bank competition, deposits, relationships

JEL Classification: G21, G28

Suggested Citation

Berger, Allen N. and Kravitz, Troy A. and Shibut, Lynn, The Many Facets of Bank Competition: Evidence from An Extraordinary Dataset (February 9, 2022). Available at SSRN: https://ssrn.com/abstract=4030784 or http://dx.doi.org/10.2139/ssrn.4030784

Allen N. Berger

University of South Carolina - Darla Moore School of Business ( email )

1014 Greene St.
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Troy A. Kravitz (Contact Author)

FDIC, Division of Insurance and Research ( email )

550 17th Street NW
Washington, DC 20429
United States

Lynn Shibut

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
318
Abstract Views
1,212
Rank
181,132
PlumX Metrics