Foreign Bank Entry and Business Volatility: Evidence from U.S. States and Other Countries

Theory suggests that bank integration (financial integration generally) can magnify or dampen the business cycles, depending on the importance of shocks to firm collateral versus shocks to the banking sector. In this paper, we show empirically that bank integration across U.S. states over the late 1970s and 1980 dampened economic volatility within states. Internationally, however, we find that foreign bank integration, which advanced widely during the 1990s, has been either unrelated to volatility of firm investment spending or positively related to that volatility. The results suggest the possibility that business spending may become more volatile as countries open their banking sectors to foreign entry.

Bank Integration and Business Volatility in the U.S.

We investigate how bank migration across state lines over the last quarter century has affected the size and covariance of business fluctuations within states. Starting with a two-state version of the unit banking model in Holmstrom and Tirole (1997), we conclude that the theoretical effect of integration on business cycle size is ambiguous, as some shocks are dampened by integration, but others are amplified. Empirically, we find that integration diminishes employment growth fluctuations within states, and decreases the deviations in employment growth across states. Business cycles within states become smaller with integration, in other words, but more alike. Our results for the United States bear on the financial convergence underway in Europe, where banks remain highly fragmented across nations.

Foreign Bank Entry and Business Volatility: Evidence from U.S. States and Other Countries

The first-order effects of relaxed bank entry restrictions have been favorable, both within the U.S. and across countries. Internationally, the benefits of foreign entry seem to depend on the level of development, but at least for developing nations entrants are more efficient than incumbent banks and the stiffer competition seems to improve overall bank efficiency. In contrast to these first-order effects, the stability implications of increased entry are less obvious. This paper investigates whether greater integration resulting from foreign bank entry has been associated with more or less business cycle volatility. We approach the topic with mix of theory and evidence from both the U.S. states and countries. While theoretical effects are mixed, the empirical effect of relaxation of restrictions of cross-state banking has been to stabilize state-level fluctuations in the U.S. Applying a related set of tests to a panel of about 100 countries, however, we find no evidence that expansion of foreign banking has reduced business fluctuations. If anything, the evidence points tentatively in the other direction.

Space Telescope Imaging Spectrograph Parallel Observations of the Planetary Nebula M94-20

The planetary nebula M94--20 in the Large Magellanic Cloud was serendipitously observed with the Space Telescope Imaging Spectrograph on board the Hubble Space Telescope as part of the Hubble Space Telescope Archival Pure Parallel Program. We present spatially resolved imaging and spectral data of the nebula and compare them with ground based data, including detection of several emission lines from the nebula and the detection of the central star. We find the total H alpha + [NII] flux = 7.3e-15 erg s^-1 cm^-2 and we estimate the magnitude of the central star to be m_V = 26.0 +/- 0.2. Many other H alpha sources have been found in M31, M33 and NGC 205 as well. We discuss the use of the parallel observations as a versatile tool for planetary nebula surveys and for other fields of astronomical research.Comment: Latex, 14 pages, 2 JPEG figures, 2 tables. PASP Research Note, June 1999, in pres

Bank Integration and Business Volatility

We investigate how bank migration across state lines over the last quarter century has affected the size and covariance of business fluctuations across states. Starting with a two-state version of the unit banking model in Holmstrom and Tirole (1997), we conclude that the theoretical effect of integration on business fluctuations is ambiguous because integration dampens the impact of bank capital shocks but amplifies the impact of firm collateral shocks. The net effect empirically seems stabilizing, however, as we find fluctuations in employment growth within states falls as integration rises, especially when we instrument for the level of integration and control for employment composition within states. Integration also weakens the link between bank capital growth within states and growth in state employment and bank lending.

Bank Integration and State Business Cycles

We investigate how integration of bank ownership across states has affected economic volatility within states. In theory, bank integration could cause higher or lower volatility, depending on whether credit supply or credit demand shocks predominate. In fact, year-to-year fluctuations in a state's economic growth fall as its banks become more integrated (via holding companies) with banks in other states. As the bank linkages between any pair of states increases, fluctuations in those two states tend to converge. We conclude that interstate banking has made state business cycles smaller, but more alike.Bank integration; Business volatility; Geographic diversification

Statutory protection of freshwater flora and fauna

The aim of this paper is to summarize the present legislation aimed at protecting freshwater species in Britain, and briefly to review its effectiveness. Some areas have been deliberately omitted, such as fisheries legislation designed to conserve stocks, and the statutory protection of birds associated with fresh waters which forms a large subject area in its own right

Boundary element modelling and full scale measurement of the acoustic performance of outdoor noise barriers

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University, 12/11/1999.The performance of various designs of outdoor noise barrier has been investigated using numerical modelling and full scale experiments. The numerical modelling has been performed using a two-dimensional boundary element method. The model has been extended to allow the efficient simulation of barrier arrangements on ground having two distinct impedance values and cross-sections incorporating cuttings. It has been reported previously that the performance of a plane screen can be enhanced by adding a device to the top of the barrier to induce destructive interference. Full scale modelling and boundary element simulations have been performed on one such commercially available device. It has been shown that, taking the height increase into account, the major contribution to the improved performance is the presence of two diffracting edges rather than any interference effects generated. It is known that the performance of a single barrier is degraded following the introduction of a barrier on the opposite side of a source. Boundary element simulations of such parallel arrangements have been performed. Modifications have been proposed to reduce the over-estimation of multiple reflections within the model, together with a method for converting predictions to the equivalent point source values. Sound absorptive, tilted and median barriers have been shown to be effective in reducing the degradation. A multiple-edge barrier configuration is known to offer improved screening performance over a plane screen. Reported in-situ measurements have suggested the behaviour to be influenced by site geometry. Boundary element calculations have been performed to identify a more efficient variant of the device. The results suggest the addition of an inclined base panel to be most effective. The boundary element model has been used to investigate the effect of shape and surface treatment upon railway noise barriers. The model has been adapted to allow the use of dipole sources characteristic of railway noise. The cross-section of the rolling stock has been shown to affect the performance of rigid barriers. If the upper edges are coincident, the results suggest that simple absorptive barriers provide better screening than tilted designs. The addition of multiple edges further enhances performance.EPSRC; Transport Research Laborator