Three Essays on the U.S. Banking Industry Evolution

There has been a dramatic consolidation process in the U.S. banking industry. Most related literatures are reduced form analyze. There are very few structural model literatures in this field, and the study focus is on branch level analysis, for example branch networks, or consumer\u27s discrete choice model on local banks. However, the consolidation process, which is driven by both bank exit and bank merger, happens at the firm level. My dissertation attempts to examine the banking industry dynamics. Specifically, I estimate the underlying real exit primitive for the industry to characterize the current industry structure observed in the data in the first chapter. As the banking industry is highly regulated in almost all countries, I examine a series of regulation environments using Monte Carlo experiments to quantify the effects of regulation changes on the corresponding stay rate and producer surplus in the U.S. banking industry in chapter two based on the structural model recovered in the previous chapter. Chapter three examines the characteristics that affect the bank stay and different exit decisions using Extended Cox Model with time-dependent covariates. By separating all merger types to construct a full set of competing risks, we can at least provide more event-specific estimates comparing to categorizing all mergers as a lump sum risk set