Competition, Concentration and their Relationship: an EmpiricalAnalysis of the Banking Industry
This paper examines competitive conditions and market structure in the banking industry, and inves- tigates their interrelationship. Competition is measured using the non-structural Panzar-Rosse model, which assesses the elasticities of interest revenues with respect to changes in banks' input prices. In order to distinguish competitive behaviour on local, national and international markets, for each coun- try, three subsamples are taken: small or local banks, medium-sized banks and large or international banks. For all 23 countries considered, estimations indicate monopolistic competition. Competition appears to be weaker in local markets and stronger in international markets. Subsequently, a relationship for the impact of the market structure on competition is derived and tested empirically, providing support for the conventional view that concentration impairs competitiveness.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.dnb.nl/en/
More information through EDIRC
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.:
- Molyneux, Phil & Lloyd-Williams, D. M. & Thornton, John, 1994. "Competitive conditions in european banking," Journal of Banking & Finance, Elsevier, vol. 18(3), pages 445-459, May.
- J.A. Bikker & J.M. Groeneveld, 1998. "Competition and Concentration in the EU Banking Industry," Research Series Supervision (discontinued) 8, Netherlands Central Bank, Directorate Supervision.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
- Marfels, Christian, 1971. "Absolute and Relative Measures of Concentration Reconsidered," Kyklos, Wiley Blackwell, vol. 24(4), pages 753-66.
- Nicola Cetorelli, 1999. "Competitive analysis in banking: appraisal of the methodologies," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q I, pages 2-15.
- Shaffer, Sherrill, 1982. "Competition, conduct and demand elasticity," Economics Letters, Elsevier, vol. 10(1-2), pages 167-171.
- P. Coccorese, 1998.
"Assessing the competitive conditions in the Italian banking system: some empirical evidence,"
BNL Quarterly Review,
Banca Nazionale del Lavoro, vol. 51(205), pages 171-191.
- P. Coccorese, 1998. "Assessing the competitive conditions in the Italian banking system: some empirical evidence," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 51(205), pages 171-191.
- Sherrill Shaffer, 1990.
"A test of competition in Canadian banking,"
90-18, Federal Reserve Bank of Philadelphia.
- 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.
- John C. Hause, 1977. "The Measurement of Concentrated Industrial Structure and the Size Distribution of Firms," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 6, number 1, pages 73-107 National Bureau of Economic Research, Inc.
- Dickson, V. A., 1981. "Conjectural variation elasticities and concentration," Economics Letters, Elsevier, vol. 7(3), pages 281-285.
- Sherrill Shaffer & James DiSalvo, 1991.
"Conduct in a banking duopoly,"
91-12, Federal Reserve Bank of Philadelphia.
- Lloyd-Williams, D. M. & Molyneux, Phil & Thornton, John, 1994. "Market structure and performance in Spanish banking," Journal of Banking & Finance, Elsevier, vol. 18(3), pages 433-443, May.
- Shaffer, Sherrill, 1989. "Competition in the U.S. banking industry," Economics Letters, Elsevier, vol. 29(4), pages 321-323.
- Suominen, Matti, 1994. " Measuring Competition in Banking: A Two-Product Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(1), pages 95-110.
- J.A. Bikker & K. Haaf, 2001.
"Competition, Concentration and their Relationship: an EmpiricalAnalysis of the Banking Industry,"
DNB Staff Reports (discontinued)
68, Netherlands Central Bank.
- Bikker, Jacob A. & Haaf, Katharina, 2002. "Competition, concentration and their relationship: An empirical analysis of the banking industry," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2191-2214, November.
- J.A. Bikker & K. Haaf, 2000. "Competition, concentration and their relationship: an empirical analysis of the banking industry," Research Series Supervision (discontinued) 30, Netherlands Central Bank, Directorate Supervision.
- 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.
- Alli Nathan & Edwin H. Neave, 1989. "Competition and Contestability in Canada's Financial System: Empirical Results," Canadian Journal of Economics, Canadian Economics Association, vol. 22(3), pages 576-94, August.
- Panzar, John C & Rosse, James N, 1987. "Testing for "Monopoly" Equilibrium," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 443-56, June.
- 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.
- Iwata, Gyoichi, 1974. "Measurement of Conjectural Variations in Oligopoly," Econometrica, Econometric Society, vol. 42(5), pages 947-66, September.
- Bertrand Rime, 1999. "Mesure du degré de concurrence dans le système bancaire suisse à l'aide du modèle de Panzar et Rosse," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 135(I), pages 21-40, March.
- Paul S. Calem & Gerald A. Carlino, 1989.
"The concentration/conduct relationship in bank deposit markets,"
89-26, Federal Reserve Bank of Philadelphia.
- Calem, Paul S & Carlino, Gerald A, 1991. "The Concentration/Conduct Relationship in Bank Deposit Markets," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 268-76, May.
- Toolsema, Linda A., 2002. "Competition in the Dutch consumer credit market," Journal of Banking & Finance, Elsevier, vol. 26(11), pages 2215-2229, November.
- Bresnahan, Timothy F., 1982. "The oligopoly solution concept is identified," Economics Letters, Elsevier, vol. 10(1-2), pages 87-92.
- Altunbas, Y. & Gardener, E. P. M. & Molyneux, P. & Moore, B., 2001. "Efficiency in European banking," European Economic Review, Elsevier, vol. 45(10), pages 1931-1955, December.
When requesting a correction, please mention this item's handle: RePEc:dnb:staffs:68. 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: (Rob Vet)
If references are entirely missing, you can add them using this form.