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



Table 5 (follows)

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 1996-99. t - statistics in brackets. * Significant at 1 per cent. ** Significant at
5 per cent. *** Significant at 10 per cent.

(i)

1996

(ii)

1997

(iii)

1998

(iv)

1999

HER

0.22

0.25

0.39

**    0.46    *

(1.11)

(1.22)

(2.26)

(3.08)

COSPER

-37.44

*    -12.89    *

-25.80

*   -15.42   *

(-10.39)

(-3.29)

(-7.43)

(-7.02)

COSRAT

-47.66

*    -33.72    *

-38.24

*    -1.76

(-8.71)

(-7.86)

(-11.09)

(-0.72)

COSTANT

9.25

*     5.97     *

4.76

*    2.38    *

(33.92)

(22.62)

(20.36)

(16.69)

N. observat.

1175

1022

1056

1046

R2

0.12

0.06

0.12

0.05

Sum     of

438

335

259

184

squared

residuals

(i)

(ii)

(iii)

(iv)

1996

1997

1998

1999

HERF

0.21

0.35

0.61

*    0.47    *

(0.95)

(1.59)

(3.21)

(2.83)

NBANKS

-0.01

0.01

0.01

*    0.01

(-0.15)

(1.23)

(2.79)

(0.08)

COSPER

-37.47

*    -12.48    *

-25.44

*   -15.40   *

(-10.38)

(-3.17)

(-7.35)

(-6.95)

COSRAT

-47.65

*    -33.75    *

-38.64

*    -1.77

(-8.70)

(-7.87)

(-11.23)

(-0.72)

COSTANT

9.26

*     5.88     *

4.63

*    2.38    *

(33.19)

(21.60)

(19.44)

(15.66)

N. observat.

1175

1022

1056

1046

R2

0.12

0.06

0.13

0.05

Sum squared

438

335

257

184

residuals

34



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