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



Table 8

DETERMINANTS OF CERTICATES OF DEPOSIT INTEREST RATES
PANEL ESTIMATION , 1990-96

Dependent variable: rates on certificates of deposit in each province.

Independent variables: Herfindahl index for market shares of certificates of deposit (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)

(ii)

(iii)

(iv)

(v)

Fixed

Fixed

Fixed

Fixed

Fixed

effects

effects

Effects

effects

effects

HER

-0.45

(-1.22)

-0.41

(-1.10)

R3

NBANKS

COSPER

12.93

*

0.50

(1.22)

12.76

*

0.009

(1.33)

12.80

*

0.009

(1.22)

12.84

*

0.59
(1.41)
0.01
(1.51)
12.63

*

COSRAT

(3.16)

-19.54

*

(3.12)

-19.35

*

(3.13)

-19.35

*

(3.14)

-19.41

*

(3.09)

-19.18

*

(-3.29)

(-3.25)

(-3.25)

(-3.26)

(-3.23)

N. observat.

8017

8017

8017

8017

8017

R2

0.71

0.71

0.71

0.71

0.71

Sum squared

7641.80

7641.81

7641.49

7640.10

7639.20

residuals

Hausman test

66.63

66.73

65.69

68.05

67.49

37



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