Estimation of the competitive conditions in the Czech banking sector

Daniel Stavarek and Iveta Řepková
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Iveta Řepková: Slezská univerzita v Opavě, Obchodně podnikatelská fakulta v Karviné, Katedra financí, Univerzitní náměstí 1934/3, 733 40 Karviná, Česká republika

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2011, vol. 59, issue 2, 299-306

Abstract: The paper uses New Empirical Industrial Organization approach, especially Panzar-Rosse model to estimates the level of competition of the banking industry in the Czech Republic during the period 2001-2009. We apply Panzar-Rosse model to estimate H statistic for a panel of 15 banks, which represent almost 90 % of the market. This paper also measures and compares the degree of banking competition in two sub-periods, 2001-2005 and 2005-2009, in order to investigate development of the competitive structure of the Czech banking industry. We found that the market was in equilibrium during most of the estimation period, which is a necessary condition for sound evaluation of the competition level. While the market can be described as perfectly competitive in 2001-2005, the intensity of competition decreased after joining the EU in 2004 and the market can be characterized as one of monopolistic competition in 2005-2009. The monopolistic competition in the Czech banking market was also revealed if the full sample 2001-2009 is considered.

Keywords: Panzar-Rosse model; competition; banking sector; Czech Republic (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (3)

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Working Paper: Estimation of the competitive conditions in the Czech banking sector (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:mup:actaun:actaun_2011059020299

DOI: 10.11118/actaun201159020299

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