Title Innovation, deregulation, and the life cycle of a financial service industry / Fumiko Hayashi, Bin Grace Li, and Zhu Wang

Published [Washington, D.C.] : International Monetary Fund, ©2015

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Description 1 online resource (42 pages) : color illustrations Series IMF working paper, 1018-5941 ; WP/15/192 IMF working paper ; WP/15/192. Contents Cover -- Contents -- I. Introduction -- II. Industry Background -- III. Theory -- A. Intuition -- B. Model Basics -- C. Emergence of ATM Networks -- D. Twin Shocks: Debit Innovation and Banking Deregulation -- E. Industry Dynamics: Characterization -- IV. Model Calibration -- A. Parameterization -- B. Parameter Values and Model Fit -- V. Counterfactual Analysis -- A. No Debit Innovation -- B. No Deregulation -- VI. Additional Discussions -- A. Anticipated Shocks -- B. Firm Heterogeneity -- VII. Concluding Remarks -- Appendix A: Timeline of the Industry Evolution -- Appendix B: Model Solution -- Appendix C: Anticipated Shocks -- References -- Figures -- Figure 1. Shared ATM Networks and Transactions -- Figure 2. Debit and Banking Development -- Figure 3. Evolution of Network Numbers -- Figure 4. Industry Facts -- Figure 5. Model fit -- Baseline Calibration -- Figure 6. Model Fit -- Baseline Calibration (continued) -- Figure 7. Counterfactual -- No Innovation -- Figure 8. Counterfactual -- No Deregulation (Scenario 1) -- Figure 9. counterfactual -- No Deregulation (Scenario 2) -- Figure 10. Network Size and Performance -- Table -- Table 1. Parameter Values for Model Calibration Summary "This paper examines innovation, deregulation, and firm dynamics over the life cycle of the U.S. ATM and debit card industry. In doing so, the authors construct a dynamic equilibrium model to study how a major product innovation (introducing the new debit card function) interacted with banking deregulation drove the industry shakeout. Calibrating the model to a novel dataset on ATM network entry, exit, size, and product offerings shows that our theory fits the quantitative pattern of the industry well. The model also allows the authors to conduct counterfactual analyses to evaluate the respective roles that innovation and deregulation played in the industry evolution."--Abstract Notes "August 2015." "Research Department." Bibliography Includes bibliographical references (pages 39-41) Notes Online resource; title from pdf title page (IMF.org Web site, viewed September 16, 2015) Subject Financial services industry -- Technological innovations -- United States -- Econometric models Debit cards -- United States -- Econometric models Automated tellers -- United States -- Econometric models United States Form Electronic book Author Li, Grace Bin, author. Wang, Zhu (Economist), author. International Monetary Fund. Research Department. ISBN 1513537733 9781513537733

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