The existing empirical evidence suggests that there is a “winner’s curse” for banks entering new markets. Actually, de novo banks generally experience higher bad loans rates than mature banks for about ten years. We investigate whether this persistence has characterized the Italian banking industry in the period 1995-2010, and find that theory predictions are confirmed by empirical results. This evidence is robust to different model specifications. We also show that cooperative credit banks (CCBs) perform better the others banks, due to their focus on local markets.

The sufferings of de novo banks

AMBROSIO, RACHELE
2013

Abstract

The existing empirical evidence suggests that there is a “winner’s curse” for banks entering new markets. Actually, de novo banks generally experience higher bad loans rates than mature banks for about ten years. We investigate whether this persistence has characterized the Italian banking industry in the period 1995-2010, and find that theory predictions are confirmed by empirical results. This evidence is robust to different model specifications. We also show that cooperative credit banks (CCBs) perform better the others banks, due to their focus on local markets.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11386/4629860
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