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Do credit associations compete with each other in Japanese regional lending markets?

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  • Kazumine Kondo

    (Aichi Gakuin University)

Abstract

This paper examines whether credit associations in Japanese regional lending markets compete on price now that Japanese financial authorities have replaced the convoy system of financial regulation with the principle of competition. Specifically, the effects of the market share of credit associations in regional markets on their lending rates are empirically investigated. Accordingly, we determined that credit associations compete with each other in regional lending markets by using two different proxies for the market share held by credit associations in a region. The first proxy was the credit associations’ share of all deposits in a region and the second was the credit associations’ share of all branch offices in a region. In addition, credit associations that face more intense competition from regional banks in regional markets were found to face more intense competition from other credit associations.

Suggested Citation

  • Kazumine Kondo, 2017. "Do credit associations compete with each other in Japanese regional lending markets?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 41(1), pages 195-210, January.
    • Handle: RePEc:spr:jecfin:v:41:y:2017:i:1:d:10.1007_s12197-016-9353-y
    DOI: 10.1007/s12197-016-9353-y
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    More about this item

    Keywords

    Credit associations; Abolition of convoy system of financial regulation; Lending rates; Market share of credit associations; Regional lending market;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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