Competition and market structure of the banking sector in Mexico

Tomás Gómez Rodríguez (), Humberto Ríos Bolívar and Adriana Zambrano Reyes
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Tomás Gómez Rodríguez: Universidad Autónoma de Hidalgo, México
Humberto Ríos Bolívar: Instituto Politécnico Nacional, México
Adriana Zambrano Reyes: Universidad Autónoma de Hidalgo

Contaduría y Administración, 2018, vol. 63, issue 1, 5-6

Abstract: The objective of this work is to evaluate the competition in the Mexican banking sector through two approaches: market concentration and power. Concentration indices and the Herfindahl-Hirschman index are used within the concentration measures. Two tools are used in the market power approach: the Lerner index and the H-statistic. To calculate the Lerner index, a simultaneous equations model is used, which is estimated with the generalized method of moments. On the other hand, a data panel estimated in first differences and fixed effects is used for the calculation of the H-statistic. A sample of 15 banks is used for the case of the market power approach, and of 32 banks for the concentration approach; both approaches are studied within the 2000-2012 period. It can be observed that within the concentration approach there is a decrease in the concentration indices, and therefore an increase in competition. The result obtained in the power market approach for the Lerner index and H-statistic is monopolistic competition.

Keywords: market structure; competition; concentration. (search for similar items in EconPapers)
JEL-codes: C33 G21 L11 L13 (search for similar items in EconPapers)
Date: 2018
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