The Effects of the Competitive Structure of Financial Institutions on Rural Bank Performance and Economic Growth

摘要

The competitive structure of local financial markets was not a factor in explaining 1973-1977 employment growth in a sample of 220 nonmetropolitan counties. Loan-to-deposit ratios of commercial banks also failed to explain employment growth. The study did support the hypothesis that bank performance is affected by the degree of local financial competition. Banks participating in more competitive markets had higher loan-to-deposit ratios and lower net income-to assets ratios.