Market Concentration and the Diffusion of New Technology in the Banking Industry

1984 ◽  
Vol 66 (4) ◽  
pp. 686 ◽  
Author(s):  
Timothy H. Hannan ◽  
John M. McDowell
Keyword(s):  
Banking Industry ◽  
New Technology ◽  
Market Concentration

Collusion in the Turkish Banking Sector

2012 ◽  
Author(s):  
Resul Aydemir
Keyword(s):  
Banking Sector ◽  
Structural Model ◽  
Banking Industry ◽  
Market Concentration ◽  
Regulatory Agencies ◽  
Sample Period ◽  
Conjectural Variation ◽  
Average Mark ◽  
Market Conduct ◽  
Variation Approach

In this paper, I consider the Turkish Banking Industry, which is dominated by a few large banks. Using a conjectural variation approach, I estimate a structural model to examine the market conduct of the largest banks for the period 1988-2009. Estimation results suggest that the Turkish banks colluded in the loan market during the sample period where the average mark-up is estimated to be in the range of 44% to 86% depending on the empirical specification. This evidence demonstrates a conflict between market concentration and competition in the Turkish banking industry. Thus, regulatory agencies should be cautious against attempts to increase concentration in the banking industry.

Market structure-performance hypothesis in Kenyan banking industry

2015 ◽  
Vol 10 (4) ◽  
pp. 697-710 ◽  
Author(s):  
Solomon W. Giorgis Sahile ◽  
Daniel Kipkirong Tarus ◽  
Thomas Kimeli Cheruiyot
Keyword(s):  
Market Structure ◽  
Market Efficiency ◽  
Market Share ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Developing Economies ◽  
Market Concentration ◽  
Bank Performance ◽  
Content Type

Purpose – The purpose of this paper is to test market structure-performance hypothesis in banking industry in Kenya. Specifically, the structure-conduct-performance (SCP) and market efficiency hypotheses were examined to determine how market concentration and efficiency affect bank performance in Kenya. Design/methodology/approach – The study used secondary data of 44 commercial banks operating from 2000 to 2009. Three proxies to measure bank performance were used while market concentration and market share were used as proxies for market structure. Market concentration was measured using two concentration measures; the concentration ratio of the four largest banks (CR4) and Herfindahl-Hirschman Index, while market share was used as a proxy for efficiency. The study made use of generalized least square regression method. Findings – The empirical results confirm that market efficiency hypothesis is a predictor of firm performance in the banking sector in Kenya and rejects the traditional SCP hypothesis. Thus, the results support the view that efficient banks maximize profitability. Practical implications – The study provides insights into the role of efficiency in enhancing profitability in commercial banks in Kenya. It has managerial implication that profitable banks ought to be efficient and dispels the notion of collusive behavior as a precursor for profitability. Originality/value – The paper fills an important gap in the extant literature by proving insights into what determines bank profitability in banking sector in Kenya. Although this area is rich in research, little work has been conducted in the developing economies and in particular no study in the knowledge has addressed this critical issue in Kenya.

scholarly journals Are the effects of market concentration and income diversification on banking performance persistent?

2020 ◽  
Vol 24 (50) ◽  
pp. 25-44
Author(s):  
Jorge A. Muñoz Mendoza ◽  
Sandra M. Sepúlveda Yelpo ◽  
Carmen L. Veloso Ramos ◽  
Carlos Delgado Fuentealba
Keyword(s):  
Economic Crisis ◽  
Banking Industry ◽  
Market Concentration ◽  
Bank Performance ◽  
Financial Policy ◽  
Income Diversification ◽  
Gmm Estimator ◽  
Linear Effect ◽  
Non Linear Effect ◽  
Positive Effect

We analyze the effects of market concentration and income diversification on banking performance. We used a sample of 134 countries for the period 1994-2011 and used the GMM estimator proposed by Arellano and Bover (1995). Our results show that market concentration and income diversification have a positive and non-linear effect on bank performance. The non-linearity suggests that the positive effect is reversed if the banking industry has high levels of market concentration and income diversification. During an economic crisis, the banking industry reduces diversification to support its performance. These results are relevant for the design of financial policy and banking strategies.

scholarly journals Are the effects of market concentration and income diversification on banking performance persistent?

2020 ◽  
Vol 24 (50) ◽  
Author(s):  
Jorge A. Muñoz Mendoza ◽  
Sandra M. Sepúlveda Yelpo ◽  
Carmen L. Veloso Ramos ◽  
Carlos Delgado Fuentealba
Keyword(s):  
Economic Crisis ◽  
Banking Industry ◽  
Market Concentration ◽  
Bank Performance ◽  
Financial Policy ◽  
Income Diversification ◽  
Gmm Estimator ◽  
Linear Effect ◽  
Non Linear Effect ◽  
Positive Effect

We analyze the effects of market concentration and income diversification on banking performance. We used a sample of 134 countries for the period 1994-2011 and used the GMM estimator proposed by Arellano and Bover (1995). Our results show that market concentration and income diversification have a positive and non-linear effect on bank performance. The non-linearity suggests that the positive effect is reversed if the banking industry has high levels of market concentration and income diversification. During an economic crisis, the banking industry reduces diversification to support its performance. These results are relevant for the design of financial policy and banking strategies.

scholarly journals PERBANDINGAN PROFITABILITAS INDUSTRI PERBANKAN SYARIAH DAN INDUSTRI PERBANKAN KONVENSIONAL MENGGUNAKAN METODE STRUKTUR KINERJA DAN PERILAKU

2007 ◽  
Vol 7 (2) ◽  
pp. 159-179
Author(s):  
Fitri Amalia ◽  
Mustafa Edwin Nasution
Keyword(s):  
Market Share ◽  
Product Differentiation ◽  
Banking Industry ◽  
Market Concentration ◽  
Fixed Effect ◽  
Islamic Banking ◽  
Pool Data ◽  
Positive Correlation ◽  
Effect Method

Positive correlation between concentration and profitability is not always a result of collusion. Market concentration can be a proxyfor efficiency and product differentiation that have done by company. The company that can be mentioned efficient and have done product differentiation can improve market share, and industry that consist of the company has tendency to be concentrated. This research tries to prove whether market share and concentration in Islamic and conventional banking industry as proxy to efficient. If it is proven, so there is no relationship between market share and concentration with profitability. it is appropriate with efficient structure hypothesis. Using pool data for Islamic and conventional banking industiy at period January 2002 until November 2005. Model that had been used in this research is adjusted Smirlock model with fixed effect method From this research, is hoped that Islamic banking industry can support efficient structure hypothesis, moreover conventional banking industry can support differentiation hypothesis.

scholarly journals Market Concentration and Income Diversification: Do They Always Promote the Financial Stability of Banking Industry?

2020 ◽  
Vol 12 (2) ◽  
pp. 341-365
Author(s):  
Jorge Andrés Muñoz Mendoza ◽  
Sandra María Sepúlveda Yelpo ◽  
Carmen Lissette Veloso Ramos ◽  
Carlos Leandro Delgado Fuentealba
Keyword(s):  
Nonlinear Effect ◽  
Financial Stability ◽  
Banking Industry ◽  
Banking System ◽  
Market Concentration ◽  
Bank Risk ◽  
Threshold Values ◽  
Financial Policies ◽  
Income Diversification ◽  
Gmm Estimator

This paper analyzes the effects of market concentration and income diversification on the financial stabilityof the world banking system. It uses the GMM estimator proposed by Arellano and Bover (1995) to study 206 countries between 1994 and 2015. The results show that market concentration and income diversification have a positive and nonlinear effect on financial stability; and a negative and nonlinear effect on bank risk. The nonlinearity shape suggests that the effects are reversed when the banking industry has a higher market concentration and income diversification. In these cases, lower levels of stability and higher risks would characterize the banking industry. Nonlinearity establishes threshold values that are relevantfor the empirical discussion oriented to an optimal design of financial policies and banking strategies.

scholarly journals Consolidation in the banking industry: HR challenges, consequences and solutions

2021 ◽  
Vol 8 (3) ◽  
pp. 147-151
Author(s):  
N Karunakaran ◽  
T Bayavanda Chinnappa
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Services ◽  
Banking Industry ◽  
New Technology ◽  
Banking System ◽  
Competitive System ◽  
System Changes ◽  
Banking Institutions ◽  
Market Driven ◽  
Opening Up

Liberalization and deregulation process started in 1991 has made lot of changes in the banking system. From a totally regulated environment, banking institutions have moved into a market driven competitive system. Changes gained momentum in the last few years. Globalization would gain greater speed in coming years particularly on account of expected opening up of financial services under WTO. Four trends changed the banking industry world over, viz, consolidation of players through mergers and acquisitions, globalization of operations, development of new technology, and universalisation of banking.

scholarly journals Competition and Concentration in Bangladeshi Banking Sector

2016 ◽  
Vol 5 (1) ◽  
pp. 16-29
Author(s):  
Anwar Hossain Repon ◽  
Zahidul Islam
Keyword(s):  
Market Structure ◽  
Concentration Ratio ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Market Concentration ◽  
Sample Period ◽  
Banking Competition ◽  
The Past ◽  
Bank Concentration

The purpose of this paper is to investigate the market structure and degree of concentration of Bangladeshi banking industry. The study measured market concentration by using widely recognized measures like k-bank concentration ratio and Herfindahl-Hirchman Index (HHI). It evaluates market structure by applying Panzar-Rosse Model over 8 years period from 2006 to 2013. The result of concentration measures indicates a decreasing trend and low level of market concentration in Bangladeshi banking industry over the sample period. The panzer-Rosse “H-Statistic” suggests that banks in Bangladesh are operating under monopolistic competition. Present paper contributes to a burgeoning literature on banking competition that has evolved significantly over the past periods on a developing country perspective like Bangladesh.

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