Deregulation, liberalization and consolidation of the Mexican banking system: Effects on competition

Joaquin Maudos () and Liliana Solís

Journal of International Money and Finance, 2011, vol. 30, issue 2, 337-353

Abstract: This paper analyzes the evolution of competition in the Mexican banking system in the period 1993-2005, a period of deregulation, liberalization and consolidation of the sector. For this purpose we use two indicators of competition from the theory of industrial organization (the Lerner index and the Panzar and Rosse's H-statistic). The empirical evidence does not permit us to reject the existence of monopolistic competition. The Lerner index shows a decrease in competitive rivalry in the deposit market and an increase in the loan market, a cross subsidization strategy being observed. The results obtained call into question the effectiveness of the measures implemented hitherto, aimed at increasing the competition of the Mexican banking system.

Keywords: Banking; Competition; Deregulation (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (33)

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Related works:
Working Paper: DEREGULATION, LIBERALIZATION AND CONSOLIDATION OF THE MEXICAN BANKING SYSTEM: EFFECTS ON COMPETITION (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:30:y:2011:i:2:p:337-353

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