County-level measures of concentration and contestability
In our analysis we aim to identify bank concentration in the relevant markets (where
we disaggregate our data all the way down to the regional level). Therefore, we refrain
from measuring concentration based on a bank’s total assets or total lending for two
reasons. The first reason concerns data availability, as banks’ total assets represent balance
sheet information which is available only at the bank level (but not disaggregated by
regions). Also, data on bank lending can only be traced to certain regions using the
Bundesbank’s credit register which, however, has a substantial threshold of 1.5 million e.
That is, even the use of lending data from the credit register would cause a substantial
bias in the analysis, especially for small regional banks (i.e., cooperative banks, savings
banks, small private banks). In order to overcome these data constraints, we measure
competition by the availability of bank branches for private and corporate customers in
certain regions. Using information on the location of branches from all German universal