Investigating the Monopoly Power in Iran's Banking Industry Using the Hypothesis Variable Approach (During the Period 1380 -1399)

Jafar Yousefi (), Mehdi Moradi (), Seyed Yousef Hajiasghari () and Rostam Qharehdaghi ()
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Jafar Yousefi: PhD student in Development Economics, Middle Branch, Islamic Azad University, Middle, Iran
Mehdi Moradi: Assistant Professor, Department of Economics, Payam Noor University,Tehran, Iran
Seyed Yousef Hajiasghari: Assistant Professor, Department of Management, Middle Branch, Islamic Azad University, Middle, Iran
Rostam Qharehdaghi: Assistant Professor, Department of Management, Middle Branch, Islamic Azad University, Middle, Iran

Quarterly Journal of Applied Theories of Economics, 2022, vol. 9, issue 3, 257-282

Abstract: Economic experts always refer to competition as a solution for economic growth and optimal use of economic resources.Over the past two decades, significant policy changes have taken place in the banking system, especially in emerging market economies, which have affected competition.The main purpose of this study is to evaluate the market monopoly power of banks during the years 2001 to 2020 based on the approach of conjectural changes.To measure monopoly power, the generalized model of Azam and Lopez (2002) was used and the equations of supply and demand of loans were tested using panel data using a two-stage least squares method with fixed effects.In order to estimate the selected model, macroeconomic variables and balance sheet data of 33 banks from the country's banking network have been used during the years 2001 to 2020. The obtained results indicate that during the mentioned period, the elasticity of conjectural changes is equal to- 0/976 and the approach of the mentioned number to -1 indicates the competitiveness of the banking industry. On the other hand, the market monopoly power index was -0/0386 and the market monopoly power in the country's banking system and the behavior based on cooperation between banks has also decreased.On the other hand, the findings of the study confirm that the price elasticity of demand for facilities in the period was equal to -0/4 and the imposition of banking sanctions by inefficient alternative markets, has made it more and more, which indicates a more inelastic demand for bank facilities that increase The market power of the banking industry

Keywords: competition; market structure; speculative changes; monopoly power; competitive strategy; Iranian banking. (search for similar items in EconPapers)
JEL-codes: G21 G28 L16 (search for similar items in EconPapers)
Date: 2022
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