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Regional banks and market power: evidence from Indonesia

Author

Listed:
  • Irwan Trinugroho
  • Sutaryo
  • Sylviana Maya Damayanti
  • Sudarso Kaderi Wiryono
  • Linggar Ikhsan Nugroho

Abstract

This paper investigates market power difference between regional banks and other banks in the context of Indonesia over the period of 2001-2009 resulting in 641 observations. Further, we also examine the determinants of market power of regional banks by considering local institutional development. According to the univariate and multivariate tests, we do find that Indonesian regional banks have a larger market power than other commercial banks. However, contrary to our expectation, in the regions with poor governance, market power of those banks is lower than that of well-governed regions. Similarly, socio-economic development is positively linked to the market power of regional banks.

Suggested Citation

  • Irwan Trinugroho & Sutaryo & Sylviana Maya Damayanti & Sudarso Kaderi Wiryono & Linggar Ikhsan Nugroho, 2018. "Regional banks and market power: evidence from Indonesia," International Journal of Monetary Economics and Finance, Inderscience Enterprises Ltd, vol. 11(2), pages 126-139.
    • Handle: RePEc:ids:ijmefi:v:11:y:2018:i:2:p:126-139
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    Cited by:

    1. Sin Tian Ho, Cynthia & Berggren, Björn, 2019. "The influence of bank branch closure on entrepreneurship sustainability," Working Paper Series 19/7, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    2. González-Garrido, A. & Gaztañaga, H. & Saez-de-Ibarra, A. & Milo, A. & Eguia, P., 2020. "Electricity and reserve market bidding strategy including sizing evaluation and a novel renewable complementarity-based centralized control for storage lifetime enhancement," Applied Energy, Elsevier, vol. 262(C).

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