TY  - GEN
AB  - We estimate a perfect information static entry game to study the effect of cultural entry barriers on entry and competition in the retail banking industry. Canada provides a favorable setting for analysis due to its high linguistic diversity, concentrated market, and regulatory entry barriers. We find that cultural affinity between customers and financial institutions that share a common cultural origin plays an important role in explaining the comparative advantages of these institutions in certain markets. Using several counterfactual experiments and additional empirical evidence, we show that the effectiveness of regulations intended to foster competition are significantly limited by cultural barriers, which is a key determinant that shapes the competitive landscape of the industry. <p><p> Data and code for peer-reviewed article published in American Economic Journal: Microeconomics.
AD  - International Monetary Fund
AD  - Bank of Canada
AU  - Perez-Saiz, Hector
AU  - Xiao, Hongyu
DA  - 2022-01-25
DO  - 10.3886/E127161V1
DO  - DOI
ID  - 3991
LA  - eng
N2  - We estimate a perfect information static entry game to study the effect of cultural entry barriers on entry and competition in the retail banking industry. Canada provides a favorable setting for analysis due to its high linguistic diversity, concentrated market, and regulatory entry barriers. We find that cultural affinity between customers and financial institutions that share a common cultural origin plays an important role in explaining the comparative advantages of these institutions in certain markets. Using several counterfactual experiments and additional empirical evidence, we show that the effectiveness of regulations intended to foster competition are significantly limited by cultural barriers, which is a key determinant that shapes the competitive landscape of the industry. <p><p> Data and code for peer-reviewed article published in American Economic Journal: Microeconomics.
PB  - American Economic Association
PY  - 2022-01-25
T1  - Data and Code for: Cultural Affinity, Regulation and Market Structure: Evidence from the Canadian Retail Banking Industry
TI  - Data and Code for: Cultural Affinity, Regulation and Market Structure: Evidence from the Canadian Retail Banking Industry
Y1  - 2022-01-25
ER  -