eng Science and Education Publishing Journal of Finance and Economics 2328-7276 2018-08-09 6 5 162 172 10.12691/jfe-6-5-1 JFE2018651 article Alexander Erler 1 Horst Gischer 2 Bernhard Herz bernhard.herz@uni-bayreuth.de 2 Department of Business, Economics and Law, University of Bayreuth, Bayreuth, Germany University of Magdeburg, Magdeburg, Germany Competition in the US banking industry as measured by the Lerner Index has on average increased substantially during the last decade. At the same time, regional differences in competition on the state level have decreased considerably. Based on a dynamic panel framework we find that these developments are mainly driven by industry specific factors such as the costs to income ratio. The empirical evidence indicates that inefficiency and the Lerner index are significant negatively correlated. Macroeconomic conditions appear to have supported these trends in competition, however, to a somewhat lesser extent. http://pubs.sciepub.com/jfe/6/5/1/jfe-6-5-1.pdf competition US banking efficiency regional markets