IDEAS home Printed from https://ideas.repec.org/a/eee/jomega/v38y2010i5p268-274.html
   My bibliography  Save this article

Competitive conditions in the Central and Eastern European banking systems

Author

Listed:
  • Delis, Manthos D.

Abstract

The aim of this study is to conduct an empirical analysis of the competitive conditions in the banking systems of Central and Eastern European countries. The well-known model of Panzar and Rosse [1] is implemented on bank-level data over the period 1999-2006. The estimates based on the separate country panels suggest a wide variation in the competitive conditions of the banking systems examined, with some being characterized as (monopolistically) competitive and other as non-competitive. Finally, the results from the full sample indicate that bank revenue is substantially influenced by structural and macroeconomic conditions.

Suggested Citation

  • Delis, Manthos D., 2010. "Competitive conditions in the Central and Eastern European banking systems," Omega, Elsevier, vol. 38(5), pages 268-274, October.
    • Handle: RePEc:eee:jomega:v:38:y:2010:i:5:p:268-274
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305-0483(09)00040-1
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Shaffer, Sherrill, 2004. "Comment on "What Drives Bank Competition? Some International Evidence" by Stijn Claessens and Luc Laeven," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 585-592, June.
    2. Iwata, Gyoichi, 1974. "Measurement of Conjectural Variations in Oligopoly," Econometrica, Econometric Society, vol. 42(5), pages 947-966, September.
    3. Athanasoglou, Panayiotis P. & Brissimis, Sophocles N. & Delis, Matthaios D., 2008. "Bank-specific, industry-specific and macroeconomic determinants of bank profitability," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 18(2), pages 121-136, April.
    4. Manthos D. Delis & K. Christos Staikouras & Panagiotis T. Varlagas, 2008. "On the Measurement of Market Power in the Banking Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(7‐8), pages 1023-1047, September.
    5. Berger, Allen N, 1995. "The Profit-Structure Relationship in Banking--Tests of Market-Power and Efficient-Structure Hypotheses," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 27(2), pages 404-431, May.
    6. repec:zbw:bofism:1995_001 is not listed on IDEAS
    7. Shaffer, Sherrill, 2004. "Patterns of competition in banking," Journal of Economics and Business, Elsevier, vol. 56(4), pages 287-313.
    8. Mamatzakis, E. & Staikouras, C. & Koutsomanoli-Fillipaki, N., 2005. "Competition and concentration in the banking sector of the South Eastern European region," Emerging Markets Review, Elsevier, vol. 6(2), pages 192-209, June.
    9. Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
    10. Semih Yildirim & George C. Philippatos, 2003. "Competition And Contestability In Central And Eastern European Banking Markets," Finance 0310004, University Library of Munich, Germany.
    11. Gelos, R. G. & Roldos, Jorge, 2004. "Consolidation and market structure in emerging market banking systems," Emerging Markets Review, Elsevier, vol. 5(1), pages 39-59, March.
    12. Claessens, Stijn & Laeven, Luc, 2004. "What Drives Bank Competition? Some International Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(3), pages 563-583, June.
    13. David Genesove & Wallace P. Mullin, 1998. "Testing Static Oligopoly Models: Conduct and Cost in the Sugar Industry, 1890-1914," RAND Journal of Economics, The RAND Corporation, vol. 29(2), pages 355-377, Summer.
    14. Keeley, Michael C, 1990. "Deposit Insurance, Risk, and Market Power in Banking," American Economic Review, American Economic Association, vol. 80(5), pages 1183-1200, December.
    15. Molyneux, Philip & Thornton, John & Michael Llyod-Williams, D., 1996. "Competition and market contestability in Japanese commercial banking," Journal of Economics and Business, Elsevier, vol. 48(1), pages 33-45, February.
    16. Brissimis, Sophocles N. & Delis, Manthos D. & Papanikolaou, Nikolaos I., 2008. "Exploring the nexus between banking sector reform and performance: Evidence from newly acceded EU countries," Journal of Banking & Finance, Elsevier, vol. 32(12), pages 2674-2683, December.
    17. De Bandt, Olivier & Davis, E. Philip, 2000. "Competition, contestability and market structure in European banking sectors on the eve of EMU," Journal of Banking & Finance, Elsevier, vol. 24(6), pages 1045-1066, June.
    18. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057, Elsevier.
    19. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    20. Corts, Kenneth S., 1998. "Conduct parameters and the measurement of market power," Journal of Econometrics, Elsevier, vol. 88(2), pages 227-250, November.
    21. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
    22. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    23. Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-456, June.
    24. Coccorese, Paolo, 2004. "Banking competition and macroeconomic conditions: a disaggregate analysis," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 14(3), pages 203-219, July.
    25. Shaffer, Sherrill, 1983. "Non-structural measures of competition : Toward a synthesis of alternatives," Economics Letters, Elsevier, vol. 12(3-4), pages 349-353.
    26. Xiao, Tiaojun & Qi, Xiangtong, 2008. "Price competition, cost and demand disruptions and coordination of a supply chain with one manufacturer and two competing retailers," Omega, Elsevier, vol. 36(5), pages 741-753, October.
    27. Bikker, Jacob A. & Haaf, Katharina, 2002. "Competition, concentration and their relationship: An empirical analysis of the banking industry," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2191-2214, November.
    28. Arellano, Manuel, 2003. "Panel Data Econometrics," OUP Catalogue, Oxford University Press, number 9780199245291.
    29. Molyneux, Phil & Lloyd-Williams, D. M. & Thornton, John, 1994. "Competitive conditions in european banking," Journal of Banking & Finance, Elsevier, vol. 18(3), pages 445-459, May.
    30. Badi H. Baltagi, 2021. "Econometric Analysis of Panel Data," Springer Texts in Business and Economics, Springer, edition 6, number 978-3-030-53953-5, August.
    31. Lau, Lawrence J., 1982. "On identifying the degree of competitiveness from industry price and output data," Economics Letters, Elsevier, vol. 10(1-2), pages 93-99.
    32. Theodorou, Petros & Florou, Giannoula, 2008. "Manufacturing strategies and financial performance--The effect of advanced information technology: CAD/CAM systems," Omega, Elsevier, vol. 36(1), pages 107-121, February.
    33. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    34. Fries, Steven & Taci, Anita, 2005. "Cost efficiency of banks in transition: Evidence from 289 banks in 15 post-communist countries," Journal of Banking & Finance, Elsevier, vol. 29(1), pages 55-81, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Manthos D. Delis & K. Christos Staikouras & Panagiotis T. Varlagas, 2008. "On the Measurement of Market Power in the Banking Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(7‐8), pages 1023-1047, September.
    2. Brissimis, Sophocles N. & Delis, Manthos D., 2011. "Bank-level estimates of market power," European Journal of Operational Research, Elsevier, vol. 212(3), pages 508-517, August.
    3. Coccorese, Paolo, 2009. "Market power in local banking monopolies," Journal of Banking & Finance, Elsevier, vol. 33(7), pages 1196-1210, July.
    4. Jacob A. Bikker & Sherrill Shaffer & Laura Spierdijk, 2012. "Assessing Competition with the Panzar-Rosse Model: The Role of Scale, Costs, and Equilibrium," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 1025-1044, November.
    5. Shaffer, Sherrill, 2004. "Patterns of competition in banking," Journal of Economics and Business, Elsevier, vol. 56(4), pages 287-313.
    6. Manthos D. Delis & K. Christos Staikouras & Panagiotis T. Varlagas, 2008. "On the Measurement of Market Power in the Banking Industry," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 35(7‐8), pages 1023-1047, September.
    7. Tabak, Benjamin M. & Fazio, Dimas M. & Cajueiro, Daniel O., 2012. "The relationship between banking market competition and risk-taking: Do size and capitalization matter?," Journal of Banking & Finance, Elsevier, vol. 36(12), pages 3366-3381.
    8. Tabak, Benjamin M. & Gomes, Guilherme M.R. & da Silva Medeiros, Maurício, 2015. "The impact of market power at bank level in risk-taking: The Brazilian case," International Review of Financial Analysis, Elsevier, vol. 40(C), pages 154-165.
    9. Natasa Koutsomanoli & Christos Staikouras, 2004. "Competition and Concentration," Money Macro and Finance (MMF) Research Group Conference 2004 26, Money Macro and Finance Research Group.
    10. Ronald Kumar & Arvind Patel, 2014. "Exploring competitiveness in banking sector of a small island economy: a study of Fiji," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(6), pages 3169-3183, November.
    11. Michael L. Polemis, 2015. "Does Monopolistic Competition Exist In The Mena Region? Evidence From The Banking Sector," Bulletin of Economic Research, Wiley Blackwell, vol. 67(S1), pages 74-96, December.
    12. Abdul Majid, Muhamed Zulkhibri & Sufian, Fadzlan, 2007. "Market Structure and Competition in Emerging Market: Evidence from Malaysian Islamic Banking Industry," MPRA Paper 12126, University Library of Munich, Germany, revised 01 Jul 2007.
    13. Ion Lapteacru & Emmanuelle Nys, 2011. "L'impact de la concurrence bancaire sur l'efficience des banques : le cas des Pays d'Europe Centrale et Orientale," Post-Print hal-00785466, HAL.
    14. Andrieş, Alin Marius & Căpraru, Bogdan, 2014. "The nexus between competition and efficiency: The European banking industries experience," International Business Review, Elsevier, vol. 23(3), pages 566-579.
    15. Delis, Manthos D. & Tsionas, Efthymios G., 2009. "The joint estimation of bank-level market power and efficiency," Journal of Banking & Finance, Elsevier, vol. 33(10), pages 1842-1850, October.
    16. Li, Shaofang & Marinč, Matej, 2016. "Competition in the clearing and settlement industry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 40(C), pages 134-162.
    17. Coccorese, Paolo & Pellecchia, Alfonso, 2013. "Multimarket contact, competition and pricing in banking," Journal of International Money and Finance, Elsevier, vol. 37(C), pages 187-214.
    18. Richards, Timothy J. & Acharya, Ram N. & Kagan, Albert, 2008. "Spatial competition and market power in banking," Journal of Economics and Business, Elsevier, vol. 60(5), pages 436-454.
    19. Trivieri, Francesco, 2007. "Does cross-ownership affect competition?: Evidence from the Italian banking industry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 17(1), pages 79-101, February.
    20. Coccorese, Paolo, 2012. "Banks as ‘fat cats’: Branching and price decisions in a two-stage model of competition," Journal of Economics and Business, Elsevier, vol. 64(5), pages 338-363.

    More about this item

    Keywords

    Market power Central and Eastern European banks Panzar-Rosse model;

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jomega:v:38:y:2010:i:5:p:268-274. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/375/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.