The Panzar–Rosse revenue test and market power in banking

Sherrill Shaffer and Laura Spierdijk

Journal of Banking & Finance, 2015, vol. 61, issue C, 340-347

Abstract: The Panzar–Rosse H statistic is a commonly used measure of market power in banking. It is widely believed that H>0 is inconsistent with significant market power. This study rigorously disproves that perception. Instead, the possibility of H>0 under conditions of substantial market power turns out robust to the timing of banks’ actions, relative costs, choice of strategic variable, degree of product differentiation, strategy (static or dynamic), and degree of heterogeneity in banks’ conduct (collusive versus fringe), and hence may be common in practice.

Keywords: Banking competition; Panzar–Rosse method; Banking oligopoly (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426615002770
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:61:y:2015:i:c:p:340-347

DOI: 10.1016/j.jbankfin.2015.09.019

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().