Measuring competition in banking: A critical review of methods

Florian Leon

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Abstract: Many studies have attempted to investigate the determinants and implications of competition in the banking industry. The literature on the measurement of competition can be divided between the structural and non-structural approaches. The structural approach infers the degree of competition from the structure of the market. The non-structural approach, based on the New Empirical Industrial Organization, assesses the degree of competition directly by observing behavior of firms in the market. This paper reviews the most frequently-used structural and non structural measures of competition in banking. It highlights their strengths and weaknesses, especially for studies based on a limited number of observations.

Keywords: Boone indicator; Panzar-Rosse model; Conjectural variation model; Lerner index; HHI; Bank; competition (search for similar items in EconPapers)
Date: 2015-06-05
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01015794v2
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Citations: View citations in EconPapers (12)

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Related works:
Working Paper: Measuring competition in banking: A critical review of methods (2015)
Working Paper: Measuring competition in banking: A critical review of methods (2014)
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