Empirical examination of the relationship between commercial banks and credit unions in a small open economy

Author(s): Craigwell, Roland C; Moore, Winston; Belgrave, Anton (2002)

Created 22 Jul, 2002
Categories Working Papers Roland Craigwell Special Collection
Views: 2166
Print
Share
This study empirically examines the relationship between commercial banks and credit unions using cross-sectional time series firm level data in a typical small, open economy. Unlike previous studies, which were largely static in nature, the paper accounts for the dynamic interaction between commercial banks and credit unions using an autoregressive distributed lag framework. Two hypotheses are examined: first, whether commercial banks competition influences credit union activity and second, whether credit union competition impacts on commercial banks' decision making processes. The study finds evidence that credit unions competition positively influences commercial banks profitability, and credit unions' profitably and interest rate spreads are in turn, negatively affected by commercial bank's competition.

WP2002pp1_10.pdf (0 Bytes)
Copyright 2020 by Central Bank of Barbados