Small banks are embedded in narrow markets and hence benefit from proximity to their customers. By referring to multilevel approach, this paper evaluates how much the performance of Italian mutual co‐operative banks is determined by geographical and individual characteristics. The effect of local markets explains 28.27 per cent of bank heterogeneity in the empty multilevel model and 33 per cent in the most extended model. Moreover, it is found that efficiency increases with market concentration and demand density but decreases with branching in local markets.
Multilevel empirics for small banks in local markets
francesco aiello
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2018-01-01
Abstract
Small banks are embedded in narrow markets and hence benefit from proximity to their customers. By referring to multilevel approach, this paper evaluates how much the performance of Italian mutual co‐operative banks is determined by geographical and individual characteristics. The effect of local markets explains 28.27 per cent of bank heterogeneity in the empty multilevel model and 33 per cent in the most extended model. Moreover, it is found that efficiency increases with market concentration and demand density but decreases with branching in local markets.File in questo prodotto:
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2017 Aiello Bonanno PRS.pdf
Open Access dal 22/01/2019
Descrizione: This is the peer reviewed version of the following article: [Aiello, F., and Bonanno, G. (2018) Multilevel empirics for small banks in local markets. Papers in Regional Science, 97: 1017– 1037. https://doi.org/10.1111/pirs.12285.], which has been published in final form at [https://rsaiconnect.onlinelibrary.wiley.com/doi/10.1111/pirs.12285]. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. This article may not be enhanced, enriched or otherwise transformed into a derivative work, without express permission from Wiley or by statutory rights under applicable legislation. Copyright notices must not be removed, obscured or modified. The article must be linked to Wiley’s version of record on Wiley Online Library and any embedding, framing or otherwise making available the article or pages thereof by third parties from platforms, services and websites other than Wiley Online Library must be prohibited. Source: Wiley.
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