Profitability and Long-term Survival of Community Banks: Evidence from Texas

This study examines the impact of distance among competing bank locations on market their pricing behavior. A general spatial autoregressive model that nests both spatial autoregressive and spatial error models is used to examine the impact of distance on pricing behavior of 686 non-metro banks in Texas. Results show that non-metro banks exercise market power in pricing their products. An increase in spatial competition may reduce profitability and challenge long term survival of small community based financial institutions.


Issue Date:
2006
Publication Type:
Conference Paper/ Presentation
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/21453
PURL Identifier:
http://purl.umn.edu/21453
Total Pages:
14
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2020-10-28

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