Abstract
We examine the effects of bank deregulation on the spatial dynamics
of retail-bank branching, exploiting, much like a quasi-natural experiment,
the context of intense liberalization reforms in Belgium in the late
nineties. Using .ne-grained data on branch network dynamics within
the metropolitan area of Antwerp and advancing novel spatial econometric
techniques, we show that these liberalization reforms radically shifted
and accelerated branch network dynamics. Entry and exit dynamics
substantially intensified, the level change in financial void grew
significantly, and bank choice markedly declined. Moreover, all these
changes consistently extended (even with greater intensity) after
the liberalization peak. However, the immediate and longer-term spatial
ramifications of the financial sector liberalization were very distinct.
All immediate changes systematically, differentially impacted the
poorer and wealthier neighborhoods, disenfranchising the poorer neighbourhoods
and favoring their wealthier counterparts. The longer-term effects
on spatial patterns of change no longer exhibited this systematic
relationship with neighborhood income. We draw out the policy implications
of our findings.
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