cubierta DT 3_2013_web

PublicationWorking Papers

A Bayesian Perspective to Analyze Branch Location Patterns in Spanish Banking

Luisa Alamá Sabater, David Conesa Guillén, Anabel Forte Deltell, Emili Tortosa-Ausina

Social Sciences > Economics

We analyze the determinants of bank branch location in Spain controlling for geography explicitly. After a long period of intense expansion, most savings banks are now involved in merger processes. However, given the contributions of this type of bank to combatting financial exclusion, this process might exacerbate the consequences of the crisis for some social groups. Related problems such as new banking regulation initiatives, or the current excess capacity in the sector, add further relevance to this problem. We address the issue from a Bayesian spatial perspective, which has several advantages over other methodologies used in previous studies. Specifically, the techniques we choose allow us to assess with some precision whether over-branching or under-branching have taken place. Results suggest that both phenomena exist in the Spanish banking sector, although implications for the three types of banks in the industry (commercial banks, savings banks, credit unions) differ.