In this paper we assess the impact of multimarket contact of banks on their market power by means of a simultaneous equation model, in which the divergence of price from marginal cost is a function of multimarket linkages. The model is estimated using aggregate data from the Italian regions for the years 1997-2009. Our results show that multimarket contact is positively and significantly correlated to the market power index, and is also connected to both home and non-home market concentration. The evidence is robust to changes in model specification and multimarket contact measures, and supports the idea that firms which have a greater amount of contact are more likely to collude.

Multimarket contact, competition and pricing in banking

COCCORESE, Paolo;
2013-01-01

Abstract

In this paper we assess the impact of multimarket contact of banks on their market power by means of a simultaneous equation model, in which the divergence of price from marginal cost is a function of multimarket linkages. The model is estimated using aggregate data from the Italian regions for the years 1997-2009. Our results show that multimarket contact is positively and significantly correlated to the market power index, and is also connected to both home and non-home market concentration. The evidence is robust to changes in model specification and multimarket contact measures, and supports the idea that firms which have a greater amount of contact are more likely to collude.
File in questo prodotto:
Non ci sono file associati a questo prodotto.

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11386/4254053
 Attenzione

Attenzione! I dati visualizzati non sono stati sottoposti a validazione da parte dell'ateneo

Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 25
  • ???jsp.display-item.citation.isi??? 25
social impact