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Strategic and Queue effects on Entry in Spanish Banking
Author(s) -
Fuentelsaz Lucio,
Gomez Jaime
Publication year - 2001
Publication title -
journal of economics and management strategy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.672
H-Index - 68
eISSN - 1530-9134
pISSN - 1058-6407
DOI - 10.1111/j.1430-9134.2001.00529.x
Subject(s) - deregulation , diversification (marketing strategy) , business , globalization , context (archaeology) , strategic complements , barriers to entry , industrial organization , empirical evidence , economics , economic geography , international economics , marketing , market economy , market structure , microeconomics , geography , philosophy , archaeology , epistemology
This paper analyzes the factors that influence entry and geographic diversification decisions, a topic of special strategic interest in a context of growing globalization. The empirical model we propose is tested in a framework— the Spanish savings‐bank market—where recent deregulation has eliminated the legal barriers to entry. Our results show two important conclusions for the evolution of the effects of branching deregulation in Europe and the US. First, it seems that entry in new geographical markets has been impeded by the strategic interactions between entrants and incumbents. Second, savings banks exhibit a preference for closer locations at the time of expanding, which may have undermined the effects of deregulation and its potential benefits for consumers.