ENJOYING THE QUIET LIFE UNDER DEREGULATION? EVIDENCE FROM ADJUSTED LERNER INDICES FOR U.S. BANKS

• 成果类型: Article
• 署名作者: Koetter, Michael; Kolari, James W.; Spierdijk, Laura
• 署名单位: University of Groningen; Texas A&M University System; Texas A&M University College Station
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00155
• 发表日期: 2012-05
• 页码: 462-480
• 关键词: MARKET POWER; industry structure; regulatory reform; asian-americans; EFFICIENCY; COMPETITION; achievement; RISK; privatization; cost

摘要

The quiet life hypothesis posits that firms with market power incur inefficiencies rather than reap monopolistic rents. We propose a simple adjustment to Lerner indices to account for the possibility of forgone rents to test this hypothesis. For a large sample of U.S. commercial banks, we find that adjusted Lerner indices are significantly larger than conventional Lerner indices and trending upward over time. Instrumental variable regressions reject the quiet life hypothesis for cost inefficiencies. However, Lerner indices adjusted for profit inefficiencies reveal a quiet life among U.S. banks.