Banking privatization and market structure in Brazil: a dynamic structural analysis

• 成果类型: Article
• 署名作者: Sanches, Fabio; Silva Junior, Daniel; Srisuma, Sorawoot
• 署名单位: Pontificia Universidade Catolica do Rio de Janeiro; City St Georges, University of London; University of Surrey
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12257
• 发表日期: 2018
• 页码: 936-963
• 关键词: government ownership; discrete games; models; entry; performance; COMPETITION; industry; finance; CHOICE; matter

摘要

This article examines the effects of bank privatization on the number of bank branches operating in small isolated markets in Brazil. We estimate a dynamic game played between Brazilian public and private banks. We find private banks compete with each other as expected. We also find public banks generate positive spillovers for private banks. Our counterfactual study shows that privatization substantially reduces the number of banks. The government can mitigate the effects of privatization by providing subsidies to private banks. Our model predicts subsidy policies that reduce operating costs are more cost-effective than entry costs for isolated markets in Brazil.