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Assessing Competition with the Panzar-Rosse Model in the Turkish Banking Sector

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  • Süleyman AÇIKALIN
  • Ýlker SAKINÇ

    (Hitit University, Turkey)

Abstract

The Turkish banking sector was reformed with new regulations after 2000. The aim of this study is to measure the degree of concentration and assess the state of competition in the Turkish banking sector using data from 22 commercial banks for the period of 2002-2013. The data is analyzed using the pooled Generalized Least Square (PGLS) method. Concentration measures of CR3, CR4 and HHI are used and they show a moderate but slightly decreasing concentration in the sector. The widely accepted Panzar and Rosse (1987) model and its H-statistic are used as a non-structural method to assess the degree of competition. The H-statistic of 0.599 is found for the period of 2002-2013. It indicates a monopolistically competitive market structure for the Turkish banking sector.

Suggested Citation

  • Süleyman AÇIKALIN & Ýlker SAKINÇ, 2015. "Assessing Competition with the Panzar-Rosse Model in the Turkish Banking Sector," Journal of Economics Bibliography, KSP Journals, vol. 2(1), pages 18-28, March.
    • Handle: RePEc:ksp:journ6:v:2:y:2015:i:1:p:18-28
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    References listed on IDEAS

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    1. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-456, June.
    2. Smirlock, Michael, 1985. "Evidence on the (Non) Relationship between Concentration and Profitability in Banking," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 17(1), pages 69-83, February.
    3. Anthony M. Simpasa, 2013. "Working Paper 168 - Competition and Market Structure in the Zambian Banking Sector," Working Paper Series 447, African Development Bank.
    4. Peltzman, Sam, 1977. "The Gains and Losses from Industrial Concentration," Journal of Law and Economics, University of Chicago Press, vol. 20(2), pages 229-263, October.
    5. Qichang Ye & Zongling Xu & Dan Fang, 2012. "Market structure, performance, and efficiency of the Chinese banking sector," Economic Change and Restructuring, Springer, vol. 45(4), pages 337-358, November.
    6. Shaffer, Sherrill, 1999. "The Competitive Impact of Disclosure Requirements in the Credit Card Industry," Journal of Regulatory Economics, Springer, vol. 15(2), pages 183-198, March.
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    Citations

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    Cited by:

    1. Bashar Abu Khalaf & Hadeel Yaseen & Ghassan Omet, 2015. "The Evolution of Bank Competition: Have Conditions Changed in the Jordanian Banking Sector?," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 5(3), pages 100-107, July.
    2. Radi Atoom & Eyad Malkawi & Basima Al Share, 2017. "Utilizing Australian Shareholders' Association (ASA): Fifteen Top Financial Ratios to Evaluate Jordanian Banks' Performance," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 7(1), pages 1-7.
    3. Bashar Abu Khalaf & Hadeel Yaseen & Ghassan Omet, 2015. "The Evolution of Bank Competition: Have Conditions Changed in the Jordanian Banking Sector?," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(8), pages 286-296, August.
    4. Radi Atoom & Eyad Malkawi & Basima Al Share, 0. "Utilizing Australian Shareholders' Association (ASA): Fifteen Top Financial Ratios to Evaluate Jordanian Banks' Performance," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 0, pages 7.

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    More about this item

    Keywords

    PanzarRosse Model; Concentration; Competition; Turkish Banking Sector; Pooled Generalized Square Model;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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