Brazilian Banking Industry Research Articles

Demand for Bank Services and Market Power in Brazilian Banking

We use bank-level data to model the demand for bank services in Brazil following the discrete choice literature. A multinomial logit specification is used to study the demand for time deposits, for an aggregate of demand and passbook savings deposits, and for loans. Market for each of these products is defined at the municipality level. In the supply side, we find the absolute price-cost margins consistent with Bertrand competition and with cartel. Our results suggest that even Bertrand competition overestimates the degree of competition in the Brazilian banking industry.

Bank privatization and productivity: Evidence for Brazil

Over the last decade, the Brazilian banking industry has undergone major and deep transformations with several privatizations of state-owned banks, mergers and acquisitions, closing down of troubled banks, entry by foreign banks, etc. The purpose of this paper is to evaluate the impacts of these changes in banking total factor productivity. We first obtain measures of bank-level productivity by employing the techniques due to Levinsohn and Petrin [Levinsohn, J., Petrin, A., 2003. Estimating production functions using inputs to control for unobservables. Review of Economic Studies 70, 317–342]. We then relate such measures to a set of bank characteristics. Our main results indicate that state-owned banks are less productive than their private peers, and that privatization has increased productivity.