scholarly journals THE STATE OF COMPETITION OF THE TURKISH BANKING INDUSTRY: AN APPLICATION OF THE PANZAR‐ROSSE MODEL

2010 ◽  
Vol 11 (1) ◽  
pp. 131-145
Author(s):  
Bora Aktan ◽  
Omar Masood
Keyword(s):  
Equilibrium State ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
The State ◽  
Competitive Markets ◽  
Long Run ◽  
Competitive Nature ◽  
Long Run Equilibrium

This paper examines the competitive structures of the Turkish banking industry over the period 1998–2008 and investigates the factors that can explain differences in the degree of competitiveness. The Panzar‐Rosse method is used to test for the competitive nature of the industry, which also gives the measure of competition, the H‐statistic, is related to a number of industry controls and prevailing banking structures. Our results indicate that the banking industry in Turkey is in an equilibrium state, further they are in long run equilibrium. We also found that the banks in Turkey are operating as a whole under conditions of monopolistic competition. However, the banks were able to achieve high records of profitability in monopolistically competitive markets. Santrauka Straipsnyje tyrinejamos konkuruojančios struktūros ir veiksniai, darantys itaka skirtingam rinkos žai‐deju konkurencingumo laipsniui Turkijos bankininkystes sektoriuje 1998–2008 m. Bankininkystes sek‐toriaus konkurencijai ivertinti taikomas Panzar‐Rosse metodas. Rezultatai leidžia teigti, kad bankininkystes sektorius Turkijoje yra pusiausvyros būsenos, pereinančios i ilgalaiki etapa. Taip pat nustatyta, kad bankai Turkijoje veikia monopolines konkurencijos salygomis. Šiomis salygomis Turkijos bankai sugeba pasiekti aukštapelninguma.

scholarly journals THE STATE OF COMPETITION OF THE TURKISH BANKING INDUSTRY: AN APPLICATION OF THE PANZAR‐ROSSE MODEL

2010 ◽  
Vol 11 (1) ◽  
pp. 131-145 ◽  
Author(s):  
Bora Aktan ◽  
Omar Masood
Keyword(s):  
Equilibrium State ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
The State ◽  
Competitive Markets ◽  
Long Run ◽  
Competitive Nature ◽  
Long Run Equilibrium

This paper examines the competitive structures of the Turkish banking industry over the period 1998–2008 and investigates the factors that can explain differences in the degree of competitiveness. The Panzar‐Rosse method is used to test for the competitive nature of the industry, which also gives the measure of competition, the H‐statistic, is related to a number of industry controls and prevailing banking structures. Our results indicate that the banking industry in Turkey is in an equilibrium state, further they are in long run equilibrium. We also found that the banks in Turkey are operating as a whole under conditions of monopolistic competition. However, the banks were able to achieve high records of profitability in monopolistically competitive markets. Santrauka Straipsnyje tyrinejamos konkuruojančios struktūros ir veiksniai, darantys itaka skirtingam rinkos žai‐deju konkurencingumo laipsniui Turkijos bankininkystes sektoriuje 1998–2008 m. Bankininkystes sek‐toriaus konkurencijai ivertinti taikomas Panzar‐Rosse metodas. Rezultatai leidžia teigti, kad bankininkystes sektorius Turkijoje yra pusiausvyros būsenos, pereinančios i ilgalaiki etapa. Taip pat nustatyta, kad bankai Turkijoje veikia monopolines konkurencijos salygomis. Šiomis salygomis Turkijos bankai sugeba pasiekti aukštapelninguma.

scholarly journals On Marshallian theory of demand and short-run equilibrium

2020 ◽  
Author(s):  
William Icefield
Keyword(s):  
Monopolistic Competition ◽  
Effective Demand ◽  
Market Clearing ◽  
Demand Shocks ◽  
Long Run ◽  
Short Run ◽  
Independent Variable ◽  
Demand Effects ◽  
Long Run Equilibrium

Mainstream neoclassical models lack genuine demand effects satisfying the principle of effective demand even with monopolistic competition, without addition of so-called frictions, such as inflexible price. There can only be demand shocks. Price is considered to be an independent variable, instead of quantity. But as Alfred Marshall original envisioned, we can instead think of quantity as an independent variable, along with associated equilibrium convergence via quantity adjustments. This allows us to consider a short-run market-clearing equilibrium with less demand than a long-run equilibrium, in contrast to mainstream models without frictions and shocks, with validation of the principle of effective demand.

scholarly journals Monetary Policy and Financial Stability in the Nigerian Banking Industry

2019 ◽  
Vol 11 (1) ◽  
pp. 82
Author(s):  
Oparah Felix Chukwudi ◽  
James Tumba Henry
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Banking Industry ◽  
Stability Index ◽  
Open Market ◽  
Long Run ◽  
Market Operation ◽  
The Impact ◽  
Nigerian Banking ◽  
Long Run Equilibrium

This study examined the impact of monetary policy on financial stability in the Nigerian banking industry for the period 2008Q1 to 2016Q2, using an error correction model. Banking industry financial stability index (BIFSI) was computed within the study and was used as a measure of financial stability in the Nigerian banking industry. The study discovered that the impact of monetary policy on financial stability in the Nigerian banking industry was weak. It also revealed a significant long run equilibrium relationship between monetary policy and financial stability in the Nigerian banking industry with a speed of adjustment to long run equilibrium of 66.54%. It was concluded that open market operation and exchange rate channels are more effective channels of transmitting monetary policy to financial stability in the banking industry, than interest rate channel.

scholarly journals The Degree of Competition in the UAE Banking Industry

2017 ◽  
Vol 4 (2) ◽  
pp. 1
Author(s):  
George Owusu Antwi ◽  
Rachna Banerjee ◽  
Amal Abeer Mohammed ◽  
Mariam Juma Muna-Habib
Keyword(s):  
Market Structure ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Balance Sheet ◽  
Competitive Environment ◽  
Input Price ◽  
Financial Products ◽  
Long Run ◽  
Banking Market

This paper has made an attempt to assess the degree of competition (or market structure) in the UAE banking sector using the H-statistics established by Panzar-Rosse (1987). Data of six years (2009-2015) have been extracted from various balance sheet and income statements of the banks. Pooled OSL estimator was used to obtain the coefficient. The inputs prices were found to be significant except the input price of labor. Total asset was registered to be positively significant. All other variables were not significant. The results of the study reveal that the UAE banking market structure is characterized by the monopolistic competition. That is, banks earned their revenue as if operating under conditions of monopolistic competition during this period. A robust check was performed to test for validity of PR-model. The results yield E-statistic which is consistent with long-run equilibrium. It is believed that both the small and the larger banks operate relatively equal more in a competitive environment. We recommend that UAE should develop new financial products and services that will provide convenience to customers while improving profitability.

scholarly journals Method of Determining Trajectories in a Neighbourhood of Long-Run Equilibrium in Neoclassical Models of Exogenous Economic Growth

2019 ◽  
Vol 65 (4) ◽  
pp. 394-421
Author(s):  
Adam Krawiec ◽  
Aleksander Stachowski ◽  
Marek Szydłowski
Keyword(s):  
Economic Growth ◽  
Power Series ◽  
Growth Models ◽  
The State ◽  
Model Parameters ◽  
State Function ◽  
Initial State ◽  
Long Run ◽  
Estimation Of Model Parameters ◽  
Long Run Equilibrium

We consider economic growth models in the form of dynamical systems. We show a method of determining trajectories in a neighbourhood of a long-run equilibrium in some neoclassical models of exogenous economic growth. This method is applied primarily to these models which in general have no analytical solution. We propose the general method of finding solutions of arbitrarily dimensional dynamical system in the form of power series. We expand the state function in Taylor's series in the neighbourhood of the initial state. The coefficients of expansion represent the parameters of the variation of the state of the system and are calculated algebraically in Mathematica. We present the method of finding solutions for the Solow-Swan model and the Mankiw-Romer-Weil model. We use also the Padé aproximant method to obtain a better convergence of the power series. This method allows to obtain a solution in the form of a series for trajectories in a neighbourhood of a long-run equilibrium in two models of exogenous economic growth. We show that obtained solutions are a good approximation of time paths, along which the long-run equilibrium is reached. We show a possibility of estimation of model parameters for which solutions in the form of series are known.

scholarly journals Market Structure and Competition of Islamic Banking in Indonesia

2018 ◽  
Vol 20 (3) ◽  
pp. 307-324
Author(s):  
. Sunarmo
Keyword(s):  
Panel Data ◽  
Market Structure ◽  
Monopolistic Competition ◽  
Islamic Banking ◽  
Long Run ◽  
Long Run Equilibrium

The aim of this study is to investigate the market structure and competition of Islamic Banking with H-statistics (Panzar and Roose) model using panel data over a period of July 2010 to September 2014. The result of H-statistics test for long-run equilibrium showed disequilibrium condition. It means that Islamic banking in developing stage. While the market structure and competition test confirmed that the value of the degree of H-statistics generally in monopolistic competition market with score 0.53 to 1.06.

scholarly journals ANALISIS TINGKAT PERSAINGAN INDUSTRI PERBANKAN DI INDONESIA

2020 ◽  
Vol 5 (3) ◽  
Author(s):  
Romauli Manurung
Keyword(s):  
Monopolistic Competition ◽  
Banking Industry ◽  
Secondary Data ◽  
Perfect Competition ◽  
Total Revenue ◽  
Combine Data ◽  
Banking Institutions ◽  
Competitive Nature ◽  
Static Nature ◽  
Type Of The Equation

This study aimed to analyze the structure of the banking industry and the level of competition of banking institutions in Indonesia. In measuring and analyzing the model used Panzar-Rosse built on indicators of competition, called H-Stats, which provide a quantitative assessment of the competitive nature of the market. H-statistics calculated from equation reduction in revenue and the size of the total revenue elasticity with respect to changes in input factor prices. Panzar and Rosse show that with certain assumptions, comparison of the static nature of the type of the equation provides a replacement for the overall level of competition prevailing in the market. By using secondary data issued by Bank Indonesia (BI), this study used pooled the data (data panel) is to combine data from year 2010 to 2014 on 9 banking institutions. The results showed that the level of competition in the Indonesian banking industry generally contain the elements of nature and the nature of the market monopoly of perfect competition or are in a situation of monopolistic competition (monopolistic competitions)

Inter-sectoral Growth Linkages and Their Implications for Agriculture: Evidence from Indian States

2018 ◽  
Vol 9 (3) ◽  
pp. 262-277 ◽  
Author(s):  
Rittu Susan Varkey ◽  
Prasant Kumar Panda
Keyword(s):  
Service Sector ◽  
The State ◽  
Indian States ◽  
Data Set ◽  
Agricultural Output ◽  
Long Run ◽  
Equilibrium Relationship ◽  
Sectoral Growth ◽  
The Impact ◽  
Long Run Equilibrium

This article empirically examines the existence of inter-sectoral growth linkages among the key sectors of the Indian economy at the state level. The examination evaluates the impact of the non-agricultural sectors of the states and that of the rest of the states on agricultural output of a particular state. An annual panel data set for 15 general category states have been taken for the period 1980–1981 to 2012–2013. Panel cointegration and fully modified ordinary least square methods have been used to study the existence of a long-run equilibrium relationship between sectors. The results suggest that there is a long-run equilibrium relationship among three sectors of the economy in the Indian states. The evaluation indicates that the industrial sector contributes positively in complementing the growth of agriculture, but the service sector advancement affects agricultural growth negatively. However, services having some direct reference to agriculture such as transport, storage and communication (TSC), trade, hotel and restaurant (THR) and banking and insurance (BI) have positive linkage with agriculture. The state specific econometric evaluation of the agricultural output varies relatively across different states, for example, in Kerala, the impact of rest of the industries and services leaves a positive significance; whereas, the study foresees the negative impact of industry and services in the states such as Bihar, Madhya Pradesh, Orissa and Rajasthan. In order to neutralize the negative linkages of service sector on agriculture, policies for promoting pro-agricultural services such as crop and agricultural insurance, agricultural loans, facilities for agricultural warehouse, marketing services, weather communication, transport services and provision of technical support to farm activities are important. Such initiatives can help agricultural sector grow along in the simultaneous development of sectors propelling growth of the economy at a faster rate.

scholarly journals Competition Conditions in Taiwan’s Public Accounting Industry

2016 ◽  
Vol 6 (1) ◽  
pp. 43
Author(s):  
Bao-Guang Chang ◽  
Tai-Hsin Huang ◽  
Hsiu-Mei Wang
Keyword(s):  
Monopolistic Competition ◽  
Market Competition ◽  
Stochastic Frontier ◽  
Perfect Competition ◽  
Public Accounting ◽  
The Public ◽  
Audit Market ◽  
Natural Logarithm ◽  
Long Run ◽  
Long Run Equilibrium

This paper investigates the degree of market competition in the public accounting industry of Taiwan over the period 1994-2008, using the ‘H statistic’ proposed by Panzar & Rosse (1987). Differing from previous works, this paper applies a newly developed model, i.e., the censored stochastic frontier (CSF) model, to test whether the audit market has achieved its long-run equilibrium. The model is superior to the conventional model that requires researchers adding a unity to the dependent variable of returns on assets (ROA) for all observations, forcing the transformed dependent variable to be non-negative. One can then take the natural logarithm of this dependent variable. Evidence shows that Taiwan’s accounting industry is characterized as monopolistic competition with a trend towards perfect competition. The result will help to build up the empirical model for public accounting industry. The CSF model confirms that this industry is already in a long-run equilibrium in the second half of the sample, which validates the use of the Panzar-Rosse model. Conversely, the employment of the conventional approach leads to a rejection of the long-run equilibrium over the entire sample period. 

Sign in / Sign up

Export Citation Format

Share Document