Competition and Efficiency in the Mexican Banking Industry Theory an

This useful new book contributes to the understanding of competition policy in the Mexican banking system and explains how levels of competition relate to banks' efficiency. It contrasts concepts of economic theory with empirical evidence to distill optim

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SARA G. CASTELLANOS, GUSTAVO A. DEL ÁNGEL & JESÚS G. GARZA-GARCÍA

Competition and Efficiency in the Mexican Banking Industry

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Competition and Efficiency in the Mexican Banking Industry Theory and Empirical Evidence

Sara G. Castellanos, Gustavo A. Del Ángel, and Jesús G. Garza-García

Palgrave

macmillan

COMPETITION AND EFFICIENCY IN THE MEXICAN BANKING INDUSTRY

Copyright © Sara G. Castellanos, Gustavo A. Del Ángel, and Jesús G. Garza-García 2016 Softcover reprint of the hardcover 1st edition 2016 978-1-137-46528-3 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission. In accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6-10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. First published 2016 by PALGRAVE MACMILLAN The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire, RG21 6XS. Palgrave Macmillan in the US is a division of Nature America, Inc., One New York Plaza, Suite 4500, New York, NY 10004-1562. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world.

ISBN 978-1-349-55677-9 E-PDF ISBN: 978–1–137–51841–5 DOI: 10.1057/9781137518415

Library of Congress Cataloging-in-Publication Data Castellanos, Sara G. (Sara Gabriela), 1968– Competition and efficiency in the Mexican banking industry : theory and empirical evidence / by Sara G. Castellanos, Gustavo A. Del Ángel and Jesús G. Garza-García. pages cm Includes bibliographical references and index. 1. Banks and banking—Mexico. 2. Competition. I. Angel, Gustavo A. del. II. Garza-García, Jesús Gustavo. III. Title. HG2714.C37 2015 332.10972—dc23

2015019818

A catalogue record for the book is available from the British Library.

To our beloved families and friends with love and gratitude. SGC, GD, JGGG

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CONTENTS

List of Figures and Tables

ix

Preface and Acknowledgments

xi

1. Introduction

1

2. Literature Review of Banking Studies

9

3. Structural Evolution and Cycles of Consolidation

37

4. Competition in the Mexican Banking System: A Review

71

5. Analysis of Competition and Efficiency in the Mexican Banking Sector

85

6. Competition Policy in the Mexican Financial System

125

7. Conclusions

159

Notes

165

References

173

Index

189

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FIGURES AND TABLES

Figures 3.1 3.2 3.3 3.4 3.5 3.6