This paper introduces a simple method to test between two general approaches to defining bank and thrift product markets. I estimate two models that endogenize market structure using data on banks and thrifts from 1,884 rural markets for the year 2000. The first model assumes that banks and...

We investigate how banking market competition, informational opacity, and sensitivity to shocks have changed over the last three decades by examining the persistence of firm-level rents. We develop propagation mechanisms with testable implications to isolate the sources of persistence. Our...

We provide evidence that a bank's subordinated debt yield spread is not, by itself, a sufficient measure of default risk. We use a model in which subordinated debt is held by investors with superior knowledge ("informed investor hypothesis"). First, we show that in theory the yield spread on...