Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/176034 
Year of Publication: 
2007
Series/Report no.: 
Texto para discussão No. 551
Publisher: 
Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia, Rio de Janeiro
Abstract: 
We measure the competitive effect of public ownership of banks in concentrated local banking markets in Brazil by extending Bresnahan and Reiss’s [1991] framework to measure the effects of entry in concentrated markets. We use variation in market size, the number of competitors and their identity to infer how conduct is affected by the entry of a private vis-à-vis a public bank. We find that, while local markets whose structure is private bank duopoly are 100% larger than private monopolies, duopolies with one public and one private bank and private monopolies are no different with respect to market size. These results suggest that, while the presence of private banks toughens competition, public banks do not affect conduct.
Subjects: 
banking industry
public versus private ownership
effect of entry.
JEL: 
L10
L13
L33
Document Type: 
Working Paper

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