The Failure of Price Competition in the Turkish Credit Card Market
The failure of competition and the consequent high and sticky interest rates in credit card markets have recently been the subject of considerable debate and research. This paper presents the first regression testing for the existence of price competition in a credit card market to be estimated free of dynamic panel bias using recent quarterly data from Turkey. The estimation reveals that even though the effect of the cost of funds on credit card rates is statistically significant, it is very weak. The paper thus provides empirical evidence for the failure of price competition in the Turkish credit card market.
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Volume (Year): 46 (2010)
Issue (Month): 0 (May)
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