Market Structure and Performance of Bangladesh Banking Industry: A Panel Data Analysis

Md Mostak Ahamed ()
Additional contact information
Md Mostak Ahamed: PhD Candidate, The Centre for EMEA Banking, Finance and Economics, London Metropolitan Business School, London Metropolitan University, UK

Bangladesh Development Studies, 2012, vol. 35, issue 3, 1-18

Abstract: The study examines the degree of concentration and performance of the Bangladesh banking industry for the period 1999-2011 by using the random effects (RE) estimator. It applies two competing hypotheses of the traditional industrial organisation theory e.g. the structure conduct performance (SCP) paradigm and efficient structure hypothesis (ESH) to investigate the relationship between the concentration and competition in the banking sector. The results of the main sample (1999-2011) do not find any support for either of the hypotheses. However, a sub-sample (2002-2011) of the study supports the SCP hypothesis that the profitability of Bangladesh banking market is determined by concentration and not by the market share of banks. It implies that concentration lowers the cost of collusion between banks and results in higher than normal profits for all market participants. Bank performance is positively associated with capitalisation, liquidity and assets size of the banks. The ownership variable suggests that government-owned banks are less profitable than other commercial banks in the market.

Keywords: Market Structure; Bank Performance; Structure$Condu ct$Performance(SCP) (search for similar items in EconPapers)
JEL-codes: L11 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://bids.org.bd/uploads/publication/BDS/35/35-3/01_Market%20Structure.pdf Full text (application/pdf)

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:ris:badest:0539

Access Statistics for this article

Bangladesh Development Studies is currently edited by Dr. Binayak Sen

More articles in Bangladesh Development Studies from Bangladesh Institute of Development Studies (BIDS) E-17, Agargaon, Sher-E-Bangla Nagar, Dhaka 1207. Contact information at EDIRC.
Bibliographic data for series maintained by Meftaur Rahman, Cheif Publication Officer, BIDS ().