This study examines the determinants of cooperative banks' diversification proclivity, with consideration of the spatial dependence effect. The empirical analysis demonstrates that Italian cooperative banks operate as a network with significant spillover effects that should not be ignored. Indeed, local banks compete in the same market segment, and any shift in their diversification strategy has a cascading effect on neighbouring cooperative banks as a result of customer migration. Finally, we observe that an increase in bank market power results in a decline in local bank lending activity.

Do spatial dependence and market power matter in the diversification of cooperative banks?

Algeri, Carmelo
Primo
;
Forgione, Antonio Fabio;Migliardo, Carlo
Ultimo
2022-01-01

Abstract

This study examines the determinants of cooperative banks' diversification proclivity, with consideration of the spatial dependence effect. The empirical analysis demonstrates that Italian cooperative banks operate as a network with significant spillover effects that should not be ignored. Indeed, local banks compete in the same market segment, and any shift in their diversification strategy has a cascading effect on neighbouring cooperative banks as a result of customer migration. Finally, we observe that an increase in bank market power results in a decline in local bank lending activity.
2022
File in questo prodotto:
File Dimensione Formato  
Economic Notes - 2022 - Algeri - Do spatial dependence and market power matter in the diversification of cooperative banks.pdf

accesso aperto

Descrizione: Articolo
Tipologia: Versione Editoriale (PDF)
Licenza: Creative commons
Dimensione 2.2 MB
Formato Adobe PDF
2.2 MB Adobe PDF Visualizza/Apri
Pubblicazioni consigliate

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/11570/3235488
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 1
  • ???jsp.display-item.citation.isi??? 1
social impact