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Competition in the Turkish banking industry


  • Burak Gunalp
  • Tuncay Celik


This study employs the Panzar-Rosse H-statistic to assess the competitive environment of the Turkish banking industry over the period 1990 to 2000. The results indicate that for the period under consideration bank revenues behaved as if they were earned under conditions of monopolistic competition. Therefore, the observed high profitability of the Turkish banking sector does not seem to be an indication of an increase in monopoly power. The liberalization process and deregulation measures appear to have beneficial effects on competition.

Suggested Citation

  • Burak Gunalp & Tuncay Celik, 2006. "Competition in the Turkish banking industry," Applied Economics, Taylor & Francis Journals, vol. 38(11), pages 1335-1342.
  • Handle: RePEc:taf:applec:v:38:y:2006:i:11:p:1335-1342
    DOI: 10.1080/00036840500405656

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    References listed on IDEAS

    1. Denizer, Cevdet, 1997. "The effects of financial liberalization and new bank entry on market structure and competition in Turkey," Policy Research Working Paper Series 1839, The World Bank.
    2. Vesala, Jukka, 1995. "Testing for competition in banking : Behavioral evidence from Finland," Scientific Monographs, Bank of Finland, number 1995_001, November.
    3. 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.
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    7. Hondroyiannis, George & Lolos, Sarantis & Papapetrou, Evangelia, 1999. "Assessing competitive conditions in the Greek banking system," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 9(4), pages 377-391, November.
    8. 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.
    9. 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.
    10. 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.
    11. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    12. Osman Zaim, 1995. "The Effect of Financial Liberalizationon the Efficiency of Turkish Commercial Banks," Working Papers 9505, Department of Economics, Bilkent University.
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    Cited by:

    1. Samuel Fosu, 2013. "Banking Competition in Africa: Sub-regional Comparative Studies," Discussion Papers in Economics 13/12, Department of Economics, University of Leicester, revised Jun 2013.
    2. Chang, Shun-Chiao & Chang, Jui-Chuan Della & Huang, Tai-Hsin, 2012. "Assessing market power in the U.S. commercial banking industry under deregulation," Economic Modelling, Elsevier, vol. 29(5), pages 1558-1565.
    3. Muhamed Majid & Fadzlan Sufian, 2006. "Consolidation and Competition in Emerging Market: An Empirical Test for Malaysian Banking Industry," Economic Change and Restructuring, Springer, vol. 39(1), pages 105-124, June.
    4. Iveta Repkov√° & Daniel Stav√°rek, 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.
    5. Jacob Bikker & Laura Spierdijk & Paul Finnie, 2006. "Misspecifiation of the Panzar-Rosse Model: Assessing Competition in the Banking Industry," DNB Working Papers 114, Netherlands Central Bank, Research Department.
    6. Fosu, Samuel, 2013. "Banking competition in Africa: Subregional comparative studies," Emerging Markets Review, Elsevier, vol. 15(C), pages 233-254.

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