Public Ownership and Anti-Preemption (a sair)

Financial access is important. Market forces create variation in financial access when public and private providers interact. We document, model, and resolve puzzling anti-preemptive patterns in the expansion of a public bank. A two-player dynamic spatial-competition entry game on the actual graph of villages is solved explicitly, and estimated, yielding these patterns. Unconventionally, the public bank maximizes profit when on its own but gets out of the way of commercial banks otherwise. The chosen parsimonious model is validated though simulations on hold-out provinces. Counterfactuals entertaining alternative strategic, collusive, or political economy motivations produce significantly different financial-access patterns