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



Table 6

DETERMINANTS OF DEPOSIT INTEREST RATES: ITALIAN MACROREGIONS
PANEL ESTIMATION, 1990-99

Dependent variable: banks’ deposit rate in each province.

Independent variables: Herfindahl index for deposit market shares (HER); concentration ratio (R3), i.e.
sum of the first 3 banks’ market shares per province; staff costs per employee (COSPER); costs/total
assets (COSRAT). Variables refer to end-of-year data, for the period 1990-99. Regressions include time
dummy variables, whose coefficients are not reported. t - statistics in brackets. * Significant at 1 per cent.
** Significant at 5 per cent. *** Significant at 10 per cent. Fixed-effects regressions, selected according to
the Hausman test.

(i)

North-West

(ii)
North-East

(iii)
Center

(iv)
South

(v)

Islands

HER

1.21

***     0.51

-1.35     **

-0.19

-0.19

(1.78)

(0.97)

(-2.12)

(-0.25)

(-0.20)

COSPER

0.74

-7.55      *

-6.50      *

-18.29     *

-20.86    *

(0.28)

(-2.67)

(-2.09)

(-4.88)

(-3.80)

COSRAT

-2.38

1.66

1.57

14.57     *

31.02    *

(-0.79)

(0.49)

(0.41)

(2.97)

(4.74)

N. observat.

2980

2899

2117

1689

876

R2

0.95

0.95

0.94

0.94

0.94

Sum squared

693.57

718.66

611.79

482.01

246.68

residuals

Hausman test

75.63

92.69

23.11

25.53

32.67

(i)

(ii)

(iii)

(iv)

(v)

North-West

North-East

Center

South

Islands

R3

0.44

-0.64      ***

-0.93    ***

-0.10

-1.42

(1.60)

(-1.77)

(-1.83)

(-0.22)

(-1.51)

COSPER

0.64

-7.39       *

-6.61      **

-18.29     *

-20.36    *

(0.24)

(-2.61)

(-2.12)

(-4.88)

(-3.72)

COSRAT

-2.51

1.63

1.64

14.54     *

29.75    *

(-0.84)

(0.48)

(0.43)

(2.97)

(4.58)

N. observat.

2980

2899

2117

1689

876

R2

0,95

0,95

0,94

0,94

0,94

Sum squared

693,74

718,03

612,16

482,01

245,94

residuals

Hausman test

76,15

97,96

22,55

25,80

33,09

35



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