Testing for Competition in the Russian Banking Sector within Panzar-Rosse approach: theoretical and empirical framework

Mamonov, Mikhail

Testing for Competition in the Russian Banking Sector within Panzar-Rosse approach: theoretical and empirical framework

Applied Econometrics, 2010, vol. 20, issue 4, 3-27

Abstract: This paper investigates the influence of both concentration and foreign banks expansion in Russian banking sector on the level of its competition. The estimation of competition is based on widely used non-structural methodology of Panzar-Rosse H-statistic (Rosse, Panzar, 1977; Panzar, Rosse, 1987) and draws upon a comprehensive panel data set of 525 Russian banks covering the period 2004q1–2009q4. From the one hand, the panel estimation outcome reveals a gradually increasing time trend for the H-statistic, thus suggesting an intensification of competition in the whole sector and among the large banks especially. From the other hand, the empirical evidence provided in this paper corroborates that foreign bank expansion strengthens competition and vice versa confirms the traditional view that concentration weakens competition

Keywords: non-structural methodology of Panzar-Rosse; competition; Russian banking sector; static and dynamic panel data analysis (search for similar items in EconPapers)
JEL-codes: C22 C23 C53 D43 G21 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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