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Does deregulation make markets more competitive? Evidence of mark-ups in Spanish savings banks

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  • Subal Kumbhakar
  • Ana Lozano-Vivas

Abstract

Modelling and testing whether competitive pressures driven by deregulatory changes make markets more competitive are examined. Departures from competitive markets are modelled via mark-up prices. Empirically, a panel data is used on Spanish savings banking industry that is undergoing unprecedented changes caused by the deregulation of financial services, the establishment of the economic and monetary union and developments in information technology. Evidence of mark-ups in output markets is found, and such mark-ups are found to decline slowly over time. This finding suggests that the presence of deregulatory pressures improved the competitive strength of the Spanish savings banks.

Suggested Citation

  • Subal Kumbhakar & Ana Lozano-Vivas, 2004. "Does deregulation make markets more competitive? Evidence of mark-ups in Spanish savings banks," Applied Financial Economics, Taylor & Francis Journals, vol. 14(7), pages 507-515.
    • Handle: RePEc:taf:apfiec:v:14:y:2004:i:7:p:507-515
    DOI: 10.1080/0960310042000216060
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    Cited by:

    1. Juan S. Mora-Sanguinetti, 2011. "The Regulation of Residential Tenancy Markets in Post-War Western Europe: An Economic Analysis," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 8(1), pages 47-75, June.
    2. Mavrakana, Christina & Psillaki, Maria, 2019. "Do board structure and compensation matter for bank stability and bank performance? Evidence from European banks," MPRA Paper 95776, University Library of Munich, Germany.
    3. Frank Asche & Subal C. Kumbhakar & Ragnar Tveterås, 2007. "Testing cost vs. profit function," Applied Economics Letters, Taylor & Francis Journals, vol. 14(10), pages 715-718.
    4. Paul Evans & Iftekhar Hasan & Ana Lozano-Vivas, 2008. "Deregulation and Convergence of Banking: The EU Experience," Finnish Economic Papers, Finnish Economic Association, vol. 21(2), pages 104-117, Autumn.
    5. Bernad, Cristina & Fuentelsaz, Lucio & Gómez, Jaime, 2010. "The effect of mergers and acquisitions on productivity: An empirical application to Spanish banking," Omega, Elsevier, vol. 38(5), pages 283-293, October.
    6. Juan Mora-Sanguinetti, 2012. "Is judicial inefficacy increasing the weight of the house property market in Spain? Evidence at the local level," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 3(3), pages 339-365, September.
    7. Grifell-Tatjé, E., 2011. "Profit, productivity and distribution: Differences across organizational forms - The case of Spanish banks," Socio-Economic Planning Sciences, Elsevier, vol. 45(2), pages 72-83, June.

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