Date of Graduation


Document Type


Degree Type



Chambers College of Business and Economics



Committee Chair

Santiago Pinto.


Three separate studies are conducted regarding banks' relative efficiency. Previous to start with the development of the studies, we review the situation before and after the enactment of the Riegle Neal's. This act restricts banks from opening branches in another state. The Riegle Neal act ended up the era of state branching deregulation which started in 1970. A discussion between proponents and opponents of branching deregulation is presented. A debate between bank's efficiency and concentration before Riegle Neal is introduced in the chapter.;The first essay found in chapter 2, develops a theoretical model of spatial competition between banks. Two different scenarios are considered. The first one assumes that banks cannot open a branch or a subsidiary in another region. The second scenario assumes that there are no branching restrictions. We derive the Nash Equilibria and determine winners and losers in each case. Moreover, we study whether the incentives to open a branch are affected when the cost of performing long-distance transactions decreases, as evidenced in the banking sector. The model is able to explain who benefited from the branching restrictions implemented in the U.S. in 1927 and why this law was then eliminated in 1994.;Chapter 3 contains the second essay. It addresses the effect of banking and branching state deregulation on banks' efficiency. The Riegle Neal Act of 1994 concluded the process of state deregulation which started in 1970. In this paper we calculate an indicator of bank efficiency using Data Envelopment Analysis (DEA). The efficiency indicator is used as the primary input to analyze the effect state branch deregulation on bank's efficiency. In addition, a failure prediction model is carried out using these efficiency indicators. Size and regional allocation effects for banks are considered in the paper.;Chapter 4 contains the last of the three studies. We test the validity of different hypotheses commonly employed to explain the proportion of non-performing loans held by banks. Particular attention is devoted to establish the link between efficiency and the share of non-performing loans. Based on the results of causality tests, our empirical analysis suggests that the Moral Hazard, Bad Management, and Skimping Hypotheses can still explain the proportion of nonperforming loans for each bank size during the last ten years. The result complements the study of Berger and DeYoung (1997).