Empirical Analysis of Determinants of Geographic Differentials in the Bank Failure Rate in the U.S.: A Heteroskedastic-Tobit Estimation

Cebula, Richard and McGrath, Richard and Perry, William (2002): Empirical Analysis of Determinants of Geographic Differentials in the Bank Failure Rate in the U.S.: A Heteroskedastic-Tobit Estimation. Published in: The Journal of American Academy of Business, Cambridge , Vol. 3, No. 1-2 (30 September 2003): pp. 119-122.

Abstract

Using the heteroskedastic-TOBIT model to deal with both censored data and a heteroskedasticity problem, this study address determinants of interstate differentials in bank closing rates over the 1982-91 period. It is found that the bank closing rate in a state is an increasing function of the cost of deposits, the percentage of state employment derived from oil and natural gas extraction, and the existence of unit banking regulations, while being a decreasing function of housing price inflation in the state, the average percentage growth rate of the GSP in the state, and the percentage of banks in the state having federal charters. (JEL codes: G2, G20, G21)

• Item Type: MPRA Paper
• Language: English
• Keywords: bank failures; economic factors; regulatory factors; bank charters
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages; G - Financial Economics > G2 - Financial Institutions and Services > G28 - Government Policy and Regulation; K - Law and Economics > K2 - Regulation and Business Law > K23 - Regulated Industries and Administrative Law; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location > R31 - Housing Supply and Markets

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