Bank Services in the Balearic Islands: The effect of the Tourism in the Branch Network

Abstract

[eng] This paper explores whether tourism increases the demand for banking services beyond what could be expected from the socioeconomic characteristics of a given region. The model is developed using a unique database of geo-localization of bank branches in the Balearic Islands crossed with a tourism index that captures the tourism affluence of each municipality. Results show tourism increases the number of branch offices possibly due to the extra demand for bank services coming from the tourists and all the businesses that are destined to satisfy the tourists’ needs. Results also confirm that more populated areas have a higher number of branches. However, the area and the economic status of the municipality have not appeared to be related with the density of the branch network.