How good is the BankScope database? A cross-validation exercise with correction factors for market concentration measures
The paper examines the quality of the BankScope database, by comparing results based on it to those obtained from the population-level data for India disseminated by the Reserve Bank of India. Despite good coverage and minor reporting errors in the individual reported units, strong evidence of selectivity bias in BankScope data for India is found. A major source of the selectivity bias for India is the almost total omission of Regional Rural Banks and Foreign Banks. It is shown that this selectivity bias affects estimates of all summary statistical measures and could lead users of the data to conclude that the Indian banking market is unimodal when, in reality, it is segmented and has a bimodal pattern. Kolmogorov-Smironov tests reveal that neither the distribution of the log of total assets nor that of market shares based on the BankScope data could be treated same as the corresponding population distributions for India. Despite these limitations, the paper shows that a few popularly used market concentration measures could be estimated from BankScope data accurately, provided the coverage ratio with respect to the size variable is known from alternative sources and is adequate. Coverage of about 90% with respect to the size variable is found to be sufficient for approximating population HHI. For k-bank concentration measures, accurate estimates could be obtained if, in addition, the top k banks in the population are also available in the sample. In contrast, for entropy measures, results indicate that adequate coverage with respect to both the size variable and the number of financial entities would be required.
|Date of creation:||Sep 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (41) 61 - 280 80 80
Fax: (41) 61 - 280 91 00
Web page: http://www.bis.org/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eric Nauenberg & Kisalaya Basu & Harish Chand, 1997. "Hirschman-Herfindahl index determination under incomplete information," Applied Economics Letters, Taylor & Francis Journals, vol. 4(10), pages 639-642.
- Huberto M. Ennis, 2001. "On the size distribution of banks," Economic Quarterly, Federal Reserve Bank of Richmond, issue Fall, pages 1-25.
- Corvoisier, Sandrine & Gropp, Reint, 2001.
"Bank Concentration and Retail Interest Rates,"
Working Paper Series
0072, European Central Bank.
When requesting a correction, please mention this item's handle: RePEc:bis:biswps:133. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Beslmeisl)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.