For banks, cost management has gained importance in the current environment of low interest rates. In this environment, banks' revenues from interest are under pressure, leading to renewed interest in the substitutability of banks' input factors. Substitution elasticities typically depend on two...

The aggregate Lerner index is a popular composite measure of multi-product banks' market power, based on the assumption that banks' single aggregate output factor is total assets. This study identifies three limitations of the aggregate Lerner index that potentially distort its interpretation as...

The economic literature has largely ignored the existence of global common factors and local spatial dependence in the assessment of the real effects of U.S. banking deregulation. Motivated by consistency concerns, this study uses spatial econometric models with common factors to analyze the...