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



Table 7

DETERMINANTS OF CURRENT ACCOUNTS INTEREST RATES
PANEL ESTIMATION, 1990-96

Dependent variable: current accounts’ rates in each province.

Independent variables: Herfindahl index for current accounts’ 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); number of banks per province (NBANKS). Variables refer to end-of-year
data, for the period 1990-96. 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.

(i)
Fixed
effects

(ii)
Fixed
effects

(iii)
Fixed
effects

(iv)
Fixed
effects

(v)
Fixed
effects

HER

-0.87   **

-0.77

***

*

(-1.91)

(-1.68)

R3

-0.99       *

-0.94   *

-3.65

-3.42

NBANKS

0.007     **

0.007

***   0.006

(1.98)

(1.75)

(1.51)

COSPER

-8.68    *

-8.57       *

-8.83      *

-8.77

*     -8.66   *

(-4.21)

(-4.16)

(-4.28)

(-4.25)

(-4.20)

COSRAT

19.47    *

19.33       *

19.66      *

19.58

*     19.43   *

(6.57)

(6.53)

(6.64)

(6.61)

(6.56)

N. observat.

8237

8237

8237

8237

8237

R2

0.85

0.85

0.85

0.85

0.85

Sum of squared

2342.05

2338.77

2341.96

2341.01

2338.00

residuals

Hausman test

47.30

53.81

49.43

58.50

76.70

36



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