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The market structure of the banking sector and financially dependent manufacturing sectors

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  • Hoxha, Indrit

Abstract

I explore the effect of the structure of the banking market on the performance of manufacturing sectors. The theoretical papers offer ambiguous explanations regarding the effects of banking market structure on the size of manufacturing sectors, and empirical studies that use cross country data do not reach a consensus on these effects. By using the Panzar–Rosse method to estimate a “H-statistic” competition index and conventional concentration indices, I provide evidence that industries that rely more on external financing perform better in countries where the banking competition is lower, and the banking concentration is greater.

Suggested Citation

  • Hoxha, Indrit, 2013. "The market structure of the banking sector and financially dependent manufacturing sectors," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 432-444.
  • Handle: RePEc:eee:reveco:v:27:y:2013:i:c:p:432-444
    DOI: 10.1016/j.iref.2013.01.004
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Varelas Erotokritos, 2015. "Quantity versus Price Bank Competition and Macroeconomic Performance Given Bank Concentration," Review of Economics, De Gruyter, vol. 66(3), pages 251-271, December.
    2. Florian LEON, 2015. "What do we know about the role of bank competition in Africa?," Working Papers 201516, CERDI.
    3. Shaffer, Sherrill & Spierdijk, Laura, 2015. "The Panzar–Rosse revenue test and market power in banking," Journal of Banking & Finance, Elsevier, vol. 61(C), pages 340-347.
    4. Leon, Florian, 2015. "Does bank competition alleviate credit constraints in developing countries?," Journal of Banking & Finance, Elsevier, vol. 57(C), pages 130-142.
    5. Huang, Xian & Xiong, Qiyue, 2015. "Bank capital buffer decisions under macroeconomic fluctuations: Evidence for the banking industry of China," International Review of Economics & Finance, Elsevier, vol. 36(C), pages 30-39.
    6. Lis-Gutiérrez, Jenny-Paola, 2013. "Medidas de concentración y estabilidad de mercado. Una aplicación para Excel
      [Market concentration and market stability measures. An application for Excel]
      ," MPRA Paper 47615, University Library of Munich, Germany.
    7. Imran Ahmad & Karim Alam, 2015. "Credit Flows to Pakistan’s Manufacturing SME Sector," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 20(Special E), pages 261-270, September.
    8. Dheera-aumpon, Siwapong, 2016. "Bank ownership and connected lending," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 274-286.
    9. Iveta Repková & Daniel Stavárek, 2014. "Concentration and Competition in the Banking Sector of Turkey," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(36), pages 625-625, May.

    More about this item

    Keywords

    Banking concentration; Banking competition; Value added; Manufacturing sectors; Economic growth;

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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