Bank deposit competition: an assessment of the deposit network in the brazilian interfinancial system
DOI:
https://doi.org/10.1590/1980-53575333mvmKeywords:
Credit unions, Commercial banks, Competition, Network analysisAbstract
This article aims to analyze whether there is a competitive association between credit unions and bank branches in the deposit “mining” market. The research design is based on analyzing the network of interbank deposits from 2008 to 2019. The assessment is multidimensional, considering data at the firm or municipal level. Five networks were estimated for each Brazilian macro region. The methodology of this study is based on the Quadratic Assignments Procedure (QAP), as well as the effects of average treatment on the treated, derived from the Propensity Score Matching (PSM) weightings. Two contexts are analyzed: the market in the ‘status quo' and a simulation with the entry of credit unions into the bank branch market. The results indicate a marginal competitive relationship between credit unions and bank branches in deposit “mining”. Moreover, it is predicted that the entry of credit unions in the hotspots is associated with a reduction in the general income obtained by firms, suggesting a possible barrier to entry. This barrier is driven by service dynamism, as bank branches tend to be uniformly distributed across municipalities compared to the single service post of credit unions, on average.
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Copyright (c) 2023 Marcelo Henrique Shinkoda, Valéria Gama Fully Bressan, Marcelo José Braga
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