This paper analyses the relation between competition and concentration in the banking sector. The empirical answer is … given by testing a monopolistic competition model of bank branching behaviour on individual bank data at county level … (départements and provinces) in France and Italy. We propose a measure of the degree of competiveness in each local market that is …

Italy and France using a maximum likelihood approach to derive a measure of the degree of competition in each local market …This paper analyses the relation between competition and concentration in a monopolistic competition model where banks …-competitive. It proves its relevance as a tool for competition policy analysis. In addition, thanks to its theoretical foundation, it …