A COMPARATIVE STUDY OF ALTERNATIVE ECONOMETRIC PACKAGES: AN APPLICATION TO ITALIAN DEPOSIT INTEREST RATES



Table 5

DETERMINANTS OF DEPOSIT INTEREST RATES

CROSS-SECTIONS (OLS), 1990-99

Dependent variable: banks’ deposit rate in each province.

Independent variables: Herfindahl index for deposit market shares (HER); staff costs per employee (COSPER);
costs/total assets (COSRAT); number of banks per province (NBANKS). Variables refer to end-of-year data, for
the period 1990-95. t - statistics in brackets. * Significant at 1 per cent. ** Significant at 5 per cent. *** Significant
at 10 per cent.

(i)

1990

(ii)
1991

(iii)

1992

(iv)

1993

(v)

1994

(vi)

1995

HER

0.14

0.23

-0.21

0.35

-0.07

-0.11

(0.54)

(0.98)

(-0.6)

(1.44)

(-0.31)

(-0.43)

COSPER

23.31     *

25.77    *

43.92

*    -4.79   ***

-20.35

*    -6.23

(2.81)

(3.82)

(5.12)

(-1.72)

(-4.95)

(-1.31)

COSRAT

-28.75    *

-10.75    **

1.68

16.77    *

-16.32

*    13.72   *

(-5.25)

(-2.11)

(0.27)

(3.03)

(-3.70)

(2.74)

COSTANT

7.62     *

6.98     *

6.60

*    6.33     *

7.45

*    6.98   *

(29.44)

(26.17)

(15.69)

(35.11)

(34.11)

(28.20)

N. observat.

804

928

1088

1115

1150

1177

R2

0,03

0,02

0,02

0,01

0,05

0,01

Sum squared

404

388

1260

646

576

740

residuals

(i)

(ii)

(iii)

(iv)

(v)

(vi)

1990

1991

1992

1993

1994

1995

HERF

0.42

0.40

0.16

0.33

-0.04

0.36

(1.49)

(1.62)

(0.44)

(1.28)

(-1.17)

(1.25)

NBANKS

0.01      *

0.01    **

0.01

*    -0.01

0.01

0.01     *

(2.69)

(2.02)

(3.63)

(-0.3)

(0.37)

(3.68)

COSPER

21.46    **

24.66    *

43.13

*    -4.80   **

-20.33    *

-5.60

*

(2.59)

(3.65)

(5.05)

(-1.72)

(-4.94)

(-1.18)

COSRAT

-27.79    *

-10.14   **

1.26

16.70    *

-16.27    *

13.13     *

(-5.08)

(-1.99)

(0.20)

(3.01)

(-3.69)

(2.63)

COSTANT

7.47     *

6.88     *

6.35

*    6.35    *

7.43     *

6.72     *

(28.37)

(25.48)

(14.97)

(32.94)

(32.56)

(26.25)

N. observat.

804

928

1088

1115

1150

1177

R2

0.04

0.02

0.03

0.01

0.05

0.01

Sum squared

400

386

1245

646

576

732

residuals

(follows)

33



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