7Until 2004 banks are legally bound to report the exact location of each of their branches to the
Deutsche Bundesbank and the Federal Supervisory Authority (BaFin); from 2005-2010 branch shares
and the branch HHI can be proxied from voluntary reporting and the cross-section of the data set. Note
that for the adequate calculation of competition measures banks which are known for operating extremely
small branches (e.g., “one-person counters” in shopping centers), are dropped from the analysis.
8Marginal costs are calculated, based on the estimated parameter of the translog cost function given
in Equation (2), as shown in Equation (3).