Concentration and Competition

T. R. Bishnoi () and Sofia Devi
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T. R. Bishnoi: The Maharaja Sayajirao University of Baroda
Sofia Devi: The Maharaja Sayajirao University of Baroda

Chapter Chapter 4 in Banking Reforms in India, 2017, pp 91-120 from Palgrave Macmillan

Abstract: Abstract It is an overview of Indian banking market structure and analysis of competitionCompetition for a quarter century since 1991 in view of persistent public sector dominance governing market for more than a half-century. For this purpose, concentrationConcentration and degree of competition are examined by the structural and non-structural methodsNon-structural methods to find out the underlying market structure of the banks. The k-firm concentration ratiosConcentration k-firm concentration ratios and Herfindhal-Hirschman Index (HHIConcentration HHI ) are estimated to find out concentration and implied degree of competition in the banking sector. Further, competitive behaviour of the banks is also tested by using the non-structural Panzar-Rosse (P-R) Model. The study covers almost a quarter century of post-reform period from 1991–1992 to 2014–2015. The results of the k-firm concentration ratiosConcentration k-firm concentration ratios and HHIConcentration HHI values indicated the presence of oligopolistic condition in Indian banking for these years. Further, the H-statistic values of 0.56 lend support to the above conclusion.

Keywords: Concentration; Competition; Oligopoly; Herfindhal-Hirschman Index (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-55663-5_4

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DOI: 10.1007/978-3-319-55663-5_4

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