ABSTRACT
Empirical studies of bank entry focus on three issues: the explanation and prediction of entry, the impact of entry on performance, and the effect of regulation on entry. The following classification of empirical studies is suggested by the method and type of data employed in each study: (1) studies that use multiple regression analysis to test models of entry into local markets, where entry includes the acquisition of existing banks by bank holding companies located outside the local market, (2) studies testing for differences in the characteristics of banks and markets before and after entry, where comparisons are made with the behavior and characteristics of control groups not experiencing entry; and (3) studies applying models of entry and bank capital formation to the U.S. banking industry over time, and to cross-sections of states. The discussion below considers each group in order, indicating in each case how their results contribute to the three basic issues.
