Keywords: Banks, competition, pricing
Abstract: This paper examines the relationship between multimarket bank presence and the profitability
(and therefore viability) of small, single-market banks. We find that increased presence of
multimarket banks is associated with a significant reduction in the profitability of small,
single-market banks operating in rural banking markets, but not of those operating in urban markets.
We explore this relationship by breaking single-market bank profits down into several components in
order to shed light on the mechanisms through which multimarket bank presence might influence the
profitability of single-market banks.
Full paper (164 KB PDF)
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Last update: November 21, 2006