This study analyzes the impact of liberalizing Florida's restrictions on the rate of new bank entry. Based upon a limit entry
profit model, an entry equation is estimated with data from 18 local banking markets in Florida. Using dummy variables it
is shown that the intercept term of the entry equation increases under Florida's relaxed geographic restrictions on banking.
Prediction results suggest that entry would have been significantly greater during the period 1977–79 had Florida allowed
state-wide branching instead of countywide branching during this period.
This paper's conclusions are consistent with earlier studies that find increased entry into banking after a reduction in government
regulation. In the current controversy over the desirability of geographic deregulation, both interstate and intrastate, this
paper provides policymakers with more evidence that deregulation enhances entry into commercial banking.
The authors are indebted to an anonymous referee for his valuable comments and suggestions.