Outdated browser

You are using an outdated browser. DNB.nl works best with:

A Frontier Measure of U.S. Banking Competition

Working Papers

Published: 10 December 2012

The three main measures of competition (HHI, Lerner Index, and H-Statistic) are uncorrelated for U.S. banks. We investigate why this occurs, propose a frontier measure of competition, and apply it to five major bank service lines using data only available since 2008. Fee-based banking services comprise 35% of bank revenues so assessing competition by service line is preferred to using a single measure for traditional activities extended to the entire bank. Academic-based competition measures explain only 1% of HHI variation. HHI merger/acquisition guidelines could be raised since current banking concentration seems unrelated to competition.
 
Key Words: Competition, banks, frontier analysis.
JEL Classification Code: L11, G21, C21.

Working paper no. 359

359 - A Frontier Measure of U.S. Banking Competition

666 Bytes PDF
Download 359 - A Frontier Measure of U.S. Banking Competition

Discover related articles