IDEAS home Printed from https://ideas.repec.org/a/fip/fedlrv/y2000imayp29-42nv.82no.3.html
   My bibliography  Save this article

Bank competition and concentration: do credit unions matter?

Author

Listed:
  • William R. Emmons
  • Frank A. Schmid

Abstract

One interesting aspect of the financial services industry is that for-profit institutions, such as commercial banks, compete directly with not-for-profit financial intermediaries, such as credit unions. In this article, William R. Emmons and Frank A. Schmid analyze the competition between banks and credit unions. Using annual county-level data on banking-market concentration and household participation rates at occupational credit unions for the period between 1989 and 1996, the authors find empirical evidence of two-way competitive interactions between banks and credit unions.

Suggested Citation

  • William R. Emmons & Frank A. Schmid, 2000. "Bank competition and concentration: do credit unions matter?," Review, Federal Reserve Bank of St. Louis, vol. 82(May), pages 29-42.
    • Handle: RePEc:fip:fedlrv:y:2000:i:may:p:29-42:n:v.82no.3
    as

    Download full text from publisher

    File URL: https://files.stlouisfed.org/files/htdocs/publications/review/00/05/05we.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Berger, Allen N, 1995. "The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 404-431, May.
    2. David Neumark & Steven A. Sharpe, 1992. "Market Structure and the Nature of Price Rigidity: Evidence from the Market for Consumer Deposits," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 657-680.
    3. William R. Emmons & Frank A. Schmid, 1999. "Wages and risk-taking in occupational credit unions: theory and evidence," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 13-32.
    4. Myron L. Kwast & Martha Starr-McCluer & John D. Wolken, 1997. "Market definition and the analysis of antitrust in banking," Finance and Economics Discussion Series 1997-52, Board of Governors of the Federal Reserve System (U.S.).
    5. repec:bla:jindec:v:46:y:1998:i:4:p:433-52 is not listed on IDEAS
    6. Robin A. Prager & Timothy H. Hannan, 1998. "Do Substantial Horizontal Mergers Generate Significant Price Effects? Evidence From The Banking Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 433-452, December.
    7. Amel, Dean F. & Hannan, Timothy H., 1999. "Establishing banking market definitions through estimation of residual deposit supply equations," Journal of Banking & Finance, Elsevier, vol. 23(11), pages 1667-1690, November.
    8. Gilbert, R Alton, 1984. "Bank Market Structure and Competition: A Survey," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 16(4), pages 617-644, November.
    9. Shaffer, Sherrill, 1989. "Competition in the U.S. banking industry," Economics Letters, Elsevier, vol. 29(4), pages 321-323.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Ely & Kenneth Robinson, 2009. "Credit Unions and Small Business Lending," Journal of Financial Services Research, Springer;Western Finance Association, vol. 35(1), pages 53-80, February.
    2. Adam Baszynski, 2011. "Mergers and acquisitions in the banking sector and the competitive structure of the banking services market in Poland since 2004," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 7(1), pages 391-407, December.
    3. John R. Walter & Patricia E. Wescott, 2008. "Antitrust analysis in banking : goals, methods, and justifications in a changed environment," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Win), pages 45-72.
    4. Robert M. Feinberg, 2003. "The Determinants of Bank Rates in Local Consumer Lending Markets: Comparing Market and Institution‐Level Results," Southern Economic Journal, John Wiley & Sons, vol. 70(1), pages 144-156, July.
    5. Sherrill Shaffer, 2002. "Conduct in a Banking Monopoly," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 20(3), pages 221-238, May.
    6. Christian E. Weller & Amy Helburn, 2009. "Public Policy Options to Build Wealth for America’s Middle Class," Working Papers wp210, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Jean-Noël Ory & Yasmina Lemzeri, 2008. "An appraisal of « cooperative banks » versus « plc banks » efficiency: a focus on the French situation and a European perspective," Cahiers du CEREFIGE 0801, CEREFIGE (Centre Europeen de Recherche en Economie Financiere et Gestion des Entreprises), Universite de Lorraine, revised 2008.
    8. Robert M. Feinberg & A.F.M. Ataur Rahman, 2006. "Are Credit Unions Just Small Banks? Determinants of Loan Rates in Local Consumer Lending Markets," Eastern Economic Journal, Eastern Economic Association, vol. 32(4), pages 647-659, Fall.
    9. Shaffer, Sherrill, 2001. "Banking conduct before the European single banking license: a cross-country comparison," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 79-104, March.
    10. Michiel van Leuvensteijn & Jacob Bikker & Adrian van Rixtel & Christoffer Kok Sørensen, 2011. "A new approach to measuring competition in the loan markets of the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3155-3167.
    11. Alexandre Pourchet & Andrée de Serres & Bernard de Montmorillon, 2014. "Une analyse néo-institutionnelle de l'évolution de la gouvernance et des activités métiers du Groupe Bancaire Coopératif en France," Post-Print hal-01457041, HAL.
    12. Michael A. Kouparitsas, 2005. "Is there evidence of the new economy in U.S. GDP data?," Economic Perspectives, Federal Reserve Bank of Chicago, vol. 29(Q I), pages 12-29.
    13. repec:dau:papers:123456789/13773 is not listed on IDEAS
    14. Charles Okeahalam, 2007. "Economics of access in a developing country: an analysis of firm‐conduct in financial services," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 34(12), pages 923-942, October.
    15. William R. Emmons & Frank A. Schmid, 2004. "When for-profits and not-for-profits compete: theory and empirical evidence from retail banking," Supervisory Policy Analysis Working Papers 2004-01, Federal Reserve Bank of St. Louis.
    16. Dereeper, Sébastien & Lobez, Frédéric & Statnik, Jean-Christophe, 2020. "Bank credit rates across the business cycle: Evidence from a French cooperative contracts database," Journal of Banking & Finance, Elsevier, vol. 112(C).
    17. Shaffer, Sherrill, 2004. "Patterns of competition in banking," Journal of Economics and Business, Elsevier, vol. 56(4), pages 287-313.
    18. Pat McGregor, 2005. "Credit Unions and the Supply of Insurance to Low Income Households," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 76(3), pages 355-374, September.
    19. Tatom, John, 2005. "Competitive advantage: a study of the federal tax exemption for credit unions," MPRA Paper 4398, University Library of Munich, Germany.
    20. Christian Weller, 2010. "Have Differences in Credit Access Diminished in an Era of Financial Market Deregulation?," Review of Social Economy, Taylor & Francis Journals, vol. 68(1), pages 1-34.
    21. Jordan van Rijn & Shuwei Zeng & Paul Hellman, 2021. "Financial institution objectives and auto loan pricing: Evidence from the survey of consumer finances," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(3), pages 995-1039, September.
    22. Griffith, Ronnie & Waithe, Kimberly & Lorde, Troy & Craigwell, Roland, 2009. "The contribution of credit unions to the national development of Barbados," MPRA Paper 33439, University Library of Munich, Germany.
    23. Michiel van Leuvensteijn & Jacob Bikker & Adrian van Rixtel & Christoffer Kok Sørensen, 2011. "A new approach to measuring competition in the loan markets of the euro area," Applied Economics, Taylor & Francis Journals, vol. 43(23), pages 3155-3167.
    24. Jean-Noël Ory & Mireille Jaeger & Emmanuelle Gurtner, 2006. "La banque à forme coopérative peut-elle soutenir durablement la compétition avec la banque SA?," Revue Finance Contrôle Stratégie, revues.org, vol. 9(2), pages 121-157, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Robert M. Adams & Lars-Hendrik Röller & Robin C. Sickles, 2002. "Market Power in Outputs and Inputs: An Empirical Application to Banking," CIG Working Papers FS IV 02-33, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    2. William R. Emmons & Frank A. Schmid, 2004. "When for-profits and not-for-profits compete: theory and empirical evidence from retail banking," Supervisory Policy Analysis Working Papers 2004-01, Federal Reserve Bank of St. Louis.
    3. Berger, Allen N. & Demsetz, Rebecca S. & Strahan, Philip E., 1999. "The consolidation of the financial services industry: Causes, consequences, and implications for the future," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 135-194, February.
    4. William R. Emmons & Frank A. Schmid, 2000. "Banks vs. credit unions; dynamic competition in local markets," Working Papers 2000-006, Federal Reserve Bank of St. Louis.
    5. Marcel Canoy & Machiel van Dijk & Jan Lemmen & Ruud de Mooij & Jürgen Weigand, 2001. "Competition and stability in banking," CPB Document 15.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Carbó, Santiago & Humphrey, David & Maudos, Joaquín & Molyneux, Philip, 2009. "Cross-country comparisons of competition and pricing power in European banking," Journal of International Money and Finance, Elsevier, vol. 28(1), pages 115-134, February.
    7. Coccorese, Paolo, 2009. "Market power in local banking monopolies," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1196-1210, July.
    8. Allen N. Berger & Seth D. Bonime & Lawrence G. Goldberg & Lawrence J. White, 1999. "The dynamics of market entry: the effects of mergers and acquisitions on do novo entry and small business lending in the banking industry," Finance and Economics Discussion Series 1999-41, Board of Governors of the Federal Reserve System (U.S.).
    9. Shaffer, Sherrill, 2004. "Patterns of competition in banking," Journal of Economics and Business, Elsevier, vol. 56(4), pages 287-313.
    10. Katerina Simons & Joanna Stavins, 1998. "Has antitrust policy in banking become obsolete?," New England Economic Review, Federal Reserve Bank of Boston, issue Mar, pages 13-26.
    11. José Azar & Sahil Raina & Martin Schmalz, 2022. "Ultimate ownership and bank competition," Financial Management, Financial Management Association International, vol. 51(1), pages 227-269, March.
    12. Céline Gondat-Larralde & Erlend Nier, 2006. "Switching costs in the market for personal current accounts: some evidence for the United Kingdom," Bank of England working papers 292, Bank of England.
    13. Evren Ors & Tara N. Rice, 2006. "Bank imputed interest rates: unbiased estimates of offered rates?," Working Paper Series WP-06-26, Federal Reserve Bank of Chicago.
    14. Elizabeth K. Kiser, 2002. "Household switching behavior at depository institutions: evidence from survey data," Finance and Economics Discussion Series 2002-44, Board of Governors of the Federal Reserve System (U.S.).
    15. Douglas D. Evanoff & Evren Ors, 2008. "The Competitive Dynamics of Geographic Deregulation in Banking: Implications for Productive Efficiency," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(5), pages 897-928, August.
    16. ÖRS, Evren & Rice, Tara, 2007. "Bank Imputed Interest Rates: Unbiased Estimates of Offered Rates?," CEPR Discussion Papers 6036, C.E.P.R. Discussion Papers.
    17. Natasa Koutsomanoli & Christos Staikouras, 2004. "Competition and Concentration," Money Macro and Finance (MMF) Research Group Conference 2004 26, Money Macro and Finance Research Group.
    18. Astrid A. Dick, 2002. "Demand estimation and consumer welfare in the banking industry," Finance and Economics Discussion Series 2002-58, Board of Governors of the Federal Reserve System (U.S.).
    19. Berger, Allen N. & Boot, Arnoud W.A., 2024. "Financial intermediation services and competition analyses: Review and paths forward for improvement," Journal of Financial Intermediation, Elsevier, vol. 57(C).
    20. José Eduardo Gómez Gónzalez & Jorge Marío Uribe Gil & Hernán Piñeros Gordo, 2009. "Determinantes de la Rentabilidad de los Bancos en Colombia: ¿Importa la Tasa de Cambio?," Borradores de Economia 556, Banco de la Republica de Colombia.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlrv:y:2000:i:may:p:29-42:n:v.82no.3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.