Competition and Concentration in Bangladeshi Banking Sector: An Application of Panzar-Rosse Model

Anwar Hossain Repon and Zahidul Islam K.m
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Anwar Hossain Repon: Social Islami Bank Limited, Dhaka, Bangladesh
Zahidul Islam K.m: Institute of Business Administration, Jahangirnagar University

International Journal of Finance & Banking Studies, 2016, vol. 5, issue 1, 14-29

Abstract: 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.

Keywords: Banking; Competition; Concentration; Hirschman-Herfindahl Index; Panzar-Rosse Statistic (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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