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The Impact of Banking Architecture Policy and Macroeconomic Condition on Indonesian Banking Concentration and Market Structure

Author

Listed:
  • Imam Asngari

    (Departement of Economic Development, University of Sriwijaya, Indonesia,)

  • Taufiq Marwa

    (Department of Economic Development, University of Sriwijaya, Indonesia,)

  • Didik Susetyo

    (Department of Economic Development, University of Sriwijaya, Indonesia,)

  • Suhel Suhel

    (Department of Economic Development, University of Sriwijaya, Indonesia)

  • Syamsurijal A. Kadir

    (Department of Economic Development, University of Sriwijaya, Indonesia.)

Abstract

This research discusses the concentration, market structure, and factors affecting the market structure of banking industry in Indonesia. The purpose of the study is to examine and analyze the impact of IBA Policies and macroeconomic conditions on the market structure of banking industry. Analytical techniques use concentration ratios and panel data regression models to analyze the determinants of the market structure of the banking industry. The market structure is measured by the ratio of banking asset concentration. Data used in this study are from 2004 until 2015. Bank balance sheets data of 109 conventional banks published by Bank Indonesia and the Financial Services Authority. Data on economic growth and inflation were published by the Central Bureau of Statistics. Based on the ratio of CR4 and CR8 concentration, it is found that the Indonesian banking market structure is monopolistic competition. Market structure is effectively and significantly influenced by banking regulatory factors, IBA consolidation policies, behavior and performance, bank size, market share, cost efficiency, inflation and economic growth.

Suggested Citation

  • Imam Asngari & Taufiq Marwa & Didik Susetyo & Suhel Suhel & Syamsurijal A. Kadir, 2018. "The Impact of Banking Architecture Policy and Macroeconomic Condition on Indonesian Banking Concentration and Market Structure," International Journal of Economics and Financial Issues, Econjournals, vol. 8(1), pages 118-125.
    • Handle: RePEc:eco:journ1:2018-01-16
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    References listed on IDEAS

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    More about this item

    Keywords

    consolidaiton; banking concentration; monopolistic; competition; macroeconomic conditions;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L8 - Industrial Organization - - Industry Studies: Services

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