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Please use this identifier to cite or link to this item: http://hdl.handle.net/2108/51

Title: Are mergers beneficial to consumers? Evidence from the Italian market for bank deposits
Authors: Panetta, Fabio
Focarelli, Dario
Keywords: mergers
efficiency
market power
bank mergers
Issue Date: Mar-2003
Publisher: CEIS
Series/Report no.: CEIS Tor Vergata Research Paper
10
Abstract: The general conclusion of the empirical literature is that in-market consolidation generates adverse price changes, thereby harming consumers. Previous studies, however, look only at the short-run pricing impact of consolidation, ignoring all effects that take a longer time to materialize. Using a database that includes detailed information on the deposit rate paid by individual banks in local markets to different categories of depositors, we investigate for the first time the long-run pricing effects of M&As. We find strong evidence that, although in the short run consolidation generates adverse price changes, these are only a temporary phenomenon. In the long run efficiency gains dominate over the market power effect of mergers, leading to more favorable prices for consumers.
URI: http://ssrn.com/abstract=286992
http://hdl.handle.net/2108/51
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