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Working Paper 2003-044C

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"A Spatial Analysis of State Banking Regulation"
by Thomas A. Garrett, Gary A. Wagner, and David C. Wheelock

We use a spatial model to investigate a state's choice of branch banking and interstate banking regimes as a function of the regime choices made by other states and other variables suggested in the literature. We extend the basic spatial econometric model by allowing spatial dependence to vary by geographic region. Our findings reveal that spatial effects have a large, statistically significant impact on state regulatory regime decisions. The importance of spatial correlation in the setting of state banking policies suggests the need to consider spatial effects in empirical models of state policies in general.

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Category > Applied Econometrics
Category > Banking
Category > Regional Economics
Author > Thomas A. Garrett
Author > David C. Wheelock