scholarly journals COMPETITIVE CONDITIONS IN BANKING INDUSTRY: AN EMPIRICAL ANALYSIS OF THE CONSOLIDATION, COMPETITION AND CONCENTRATION IN THE INDONESIA BANKING INDUSTRY BETWEEN 2001 AND 2009

2012 ◽  
Vol 14 (2) ◽  
pp. 151-186
Author(s):  
Tri Mulyaningsih ◽  
Anne Daly
Keyword(s):  
Mergers And Acquisitions ◽  
Banking Industry ◽  
Market Competition ◽  
Market Concentration ◽  
Jel Classification ◽  
Competitive Market ◽  
Financial Report ◽  
Conventional View ◽  
The Past ◽  
Banking Market

Few large banks dominate the Indonesia banking industri. Furthermore, in the past ten years, there were a series of mergers and acquisitions in the banking market. The facts cause implications on competition. In this paper, we examine these issues exploiting an unconsolidated annual financial report of all commercial banks between 2001 and 2009. The Panzar-Rose method is employed to examine the banks behavior in competition. Estimates indicate that banks in all three subsamples, large; medium-sized and small are working in a monopolistically competitive market. The analysis of market concentration supports the conventional view that concentration impairs competition. The study shows that the most competitive market was the medium-sized banks because it was least concentrated. In contrast, the large market was more concentrated thus it was less competitive. The consolidation policies driven by the Central Bank reduced market concentration because mergers and acquisitions were mostly conducted by the mediumsized and small banks. Further the improvement of market share distribution and the increasing capacity of the merging banks enhanced competition in the Indonesia banking industry. JEL Classification: D43, G21Keywords: Banking, market competition, market structure

scholarly journals COMPETITIVE CONDITIONS IN BANKING INDUSTRY: AN EMPIRICAL ANALYSIS OF THE CONSOLIDATION, COMPETITION AND CONCENTRATION IN THE INDONESIA BANKING INDUSTRY BETWEEN 2001 AND 2009

2012 ◽  
Vol 14 (2) ◽  
pp. 141-175 ◽  
Author(s):  
Tri Mulyaningsih ◽  
Anne Daly
Keyword(s):  
Mergers And Acquisitions ◽  
Commercial Banks ◽  
Banking Industry ◽  
Market Competition ◽  
Market Concentration ◽  
Competitive Market ◽  
Financial Report ◽  
Conventional View ◽  
The Past ◽  
Banking Market

Few large banks dominate the Indonesia banking industri. Furthermore, in the past ten years, there were a series of mergers and acquisitions in the banking market. The facts cause implications on competition. In this paper, we examine these issues exploiting an unconsolidated annual financial report of all commercial banks between 2001 and 2009. The Panzar-Rose method is employed to examine the banks behavior in competition. Estimates indicate that banks in all three subsamples, large; medium-sized and small are working in a monopolistically competitive market. The analysis of market concentration supports the conventional view that concentration impairs competition. The study shows that the most competitive market was the medium-sized banks because it was least concentrated. In contrast, the large market was more concentrated thus it was less competitive. The consolidation policies driven by the Central Bank reduced market concentration because mergers and acquisitions were mostly conducted by the mediumsized and small banks. Further the improvement of market share distribution and the increasing capacity of the merging banks enhanced competition in the Indonesia banking industry.JEL Classification: D43, G21Keywords: Banking, market competition, market structure

Where You Live Matters: Local Bank Competition, Online Marketplace Lending, and Disparity in Borrower Benefits

2021 ◽  
Author(s):  
Mohammed Alyakoob ◽  
Mohammad S. Rahman ◽  
Zaiyan Wei
Keyword(s):  
Mergers And Acquisitions ◽  
Consumer Credit ◽  
Credit Market ◽  
Bank Loan ◽  
Competitive Market ◽  
Local Market ◽  
Bank Competition ◽  
The Past ◽  
Online Marketplace ◽  
Geographic Boundaries

In the past decade, the proliferation of online marketplace lending has been disrupting the consumer credit market, especially for personal loans for debt consolidation. These lenders, for example, Lending Club, transcend the geographic boundaries within which local banks operate and offer homogeneous access and terms to borrowers. However, the ultimate benefits borrowers derive from marketplace lending can differ significantly because local alternatives may replace marketplace loans when available and favorable. Correspondingly, if local bank competition drives the substitution of an existing marketplace loan with a traditional bank loan, the promise of equal benefits to all borrowers from marketplace lending is unlikely to fully materialize. This competitive dynamic has implications for policy making, particularly in judging the ramifications of bank mergers and acquisitions (M&As). Our results indicate that a borrower who resides in a more competitive market is more likely to pay off a P2P loan early by making a large, one-time payment compared with a borrower from a less competitive market, indicating a substitution with a local bank loan. Thus, borrowers from different markets do not benefit equally from online marketplace lending, disrupting the consumer credit market. In particular, consumers in smaller markets continue to be disadvantaged because of the absence of competitive intensity. This is a consequence of traditional banks competing within their local markets and incentivized to attract marketplace borrowers to traditional loans primarily by their local market conditions. Therefore, unless geographic frictions in traditional lending markets are removed, digital disruptions cannot equalize the benefits to consumers.

scholarly journals Competition and Concentration in Bangladeshi Banking Sector

2016 ◽  
Vol 5 (1) ◽  
pp. 16-29
Author(s):  
Anwar Hossain Repon ◽  
Zahidul Islam
Keyword(s):  
Market Structure ◽  
Concentration Ratio ◽  
Banking Sector ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Market Concentration ◽  
Sample Period ◽  
Banking Competition ◽  
The Past ◽  
Bank Concentration

The purpose of this paper is to investigate the market structure and degree of concentration of Bangladeshi banking industry. The study measured market concentration by using widely recognized measures like k-bank concentration ratio and Herfindahl-Hirchman Index (HHI). It evaluates market structure by applying Panzar-Rosse Model over 8 years period from 2006 to 2013. The result of concentration measures indicates a decreasing trend and low level of market concentration in Bangladeshi banking industry over the sample period. The panzer-Rosse “H-Statistic” suggests that banks in Bangladesh are operating under monopolistic competition. Present paper contributes to a burgeoning literature on banking competition that has evolved significantly over the past periods on a developing country perspective like Bangladesh.

scholarly journals Market Concentration, Capital and Risk Taking in Banking Industry

2021 ◽  
Vol 14 (1) ◽  
pp. 69
Author(s):  
Erika Sefila Putri ◽  
Rahmat Setiawan
Keyword(s):  
Risk Taking ◽  
Commercial Banks ◽  
Banking Industry ◽  
Banking System ◽  
Market Concentration ◽  
Bank Risk ◽  
Bank Capital ◽  
Banking Market ◽  
The Relationship ◽  
Positive Effect

Banking market concentration is an interesting banking topic to study because the banking market structure plays an important role in a country's banking system. This study aims to determine the relationship between banking market concentration and bank risk taking, and bank capital as a moderating variable on the relationship between bank capital and bank risk taking. The test was conducted using multiple linear regression on 104 conventional commercial banks in Indonesia from 2007 to 2016. The results of this study indicate that banking market concentration has a positive effect on bank risk-taking, and bank capital weakens the positive effect of bank market concentration on bank risk-taking.

scholarly journals Do New Brooms Sweep Clean? Evidence that New CEOs Take a ‘Big Bath’ in the Banking Industry

2019 ◽  
Vol 18 (1) ◽  
pp. 106-144
Author(s):  
Chung-Hua Shen ◽  
Chien-An Wang
Keyword(s):  
Mergers And Acquisitions ◽  
Chief Executive Officers ◽  
Banking Industry ◽  
Chief Executive ◽  
Jel Classification ◽  
Big Bath ◽  
Asset Quality ◽  
Executive Officers ◽  
Loan Losses ◽  
Privately Owned

This study investigates whether significant changes exist in providing loan losses and loan charge-offs during turnovers of chief executive officers (CEOs). Providing loan losses is referred to as a ‘big bath in earnings’, and providing loan charge-offs is referred to as a ‘big bath in asset quality’. We classify CEO turnovers into three types, namely, forced and voluntary CEO turnovers in privately owned banks (POB), turnovers in government-owned banks (GOB) and turnovers as outcomes of mergers and acquisitions (M&As). Using findings based on the data of Taiwanese commercial banks, we demonstrate that the forcibly appointed CEOs exhibit big baths in earnings and asset quality, whereas the voluntarily appointed CEOs exhibit a big bath in earnings but not in asset quality. Compared with the CEO turnover in a POB, the appointed CEO in a GOB shows no big bath in either earnings or asset quality. Moreover, turnovers resulting from M&As do not induce big baths. JEL Classification: C23, G21, G28, M41, M48

scholarly journals Effect of Mergers and Acquisitions on Market Concentration and Interest Spread

2011 ◽  
Vol 3 (3) ◽  
pp. 190-197 ◽  
Author(s):  
Mehwish Aziz Khan ◽  
Attiya Javid .
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Performance ◽  
Banking Industry ◽  
Threshold Level ◽  
Market Concentration ◽  
Optimum Level ◽  
Antitrust Authority ◽  
The Right ◽  
Relationship Of ◽  
The Relationship

This study investigates the relationship of mergers & acquisitions with the interest spread of the banking industry in Pakistan. To assess whether the merger of Pakistani banks were a success or otherwise, profitability, liquidity ratios, and net interest spread are computed which are considered essential to judge the financial performance of any bank. Data is taken for the period of 1997-2010 and this data have been used to calculate the interest spread and market concentration. Market Concentration is calculated by using Herfindahl-Hirschman Index or HHI. Findings show that the profitability and net interest spread of two merged banks declines as a result of mergers. It is also revealed that Concentration of the banking industry shows a rising trend during 2008 and 2009 after mergers occurred during 2007 as a result of merger. However, it shows the level that almost approaches the threshold i.e. 1000. One or two more mergers can push up threshold level of HH index. It means that it is the right time for banking industry of Pakistan to be reviewed by any antitrust authority to maintain the optimum level of competition.

scholarly journals Market Structure, Income Diversity, and Stability: Empirical Study of Banking Industry Indonesia

2021 ◽  
Vol 25 (3) ◽  
pp. 701-716
Author(s):  
Hadi Satria Ganefi ◽  
Wita Juwita Ermawati ◽  
Dedi Budiman Hakim
Keyword(s):  
Market Structure ◽  
Monopolistic Competition ◽  
Banking Industry ◽  
Risk Measures ◽  
Market Competition ◽  
Real Sector ◽  
Z Score ◽  
Banking Market ◽  
The World ◽  
Bank Group

Banking as an intermediary institution has an essential role in the world of economy. Apart from providing financing to the real sector, banks currently still dominate the Indonesian financial system with an asset share of 77.25%. Based on the existing conditions, Indonesia's banking market is still dominated by several banks, especially in the BUKU 4 bank group. This is to indicate a bank of Indonesia is generally still facing relatively low competition. In addition, the large concentration makes it necessary for banks to divert their main activities by diversifying into non-traditional activities in carrying out their operations. This study aims to analyze how the market competition in Indonesia during the period 2014-2019 and examine the effect of competition and diversification income on stable banks. The panzer rosse model is used to analyze the market structure; for diversification, this research uses calculations with the Herfindahl Hirshman Index while stability uses two risk measures, namely NPL and Z Score, as a proxy for stability. The results show that, in general, the banking industry is under monopolistic competition. Competition has a significant effect on stability banks as measured through NPL risk, and this research supports the competition-fragility paradigm. A meanwhile, diversification income variables have not to effect on stability.DOI: 10.26905/jkdp.v25i3.5887

Collusion in the Turkish Banking Sector

2012 ◽  
Author(s):  
Resul Aydemir
Keyword(s):  
Banking Sector ◽  
Structural Model ◽  
Banking Industry ◽  
Market Concentration ◽  
Regulatory Agencies ◽  
Sample Period ◽  
Conjectural Variation ◽  
Average Mark ◽  
Market Conduct ◽  
Variation Approach

In this paper, I consider the Turkish Banking Industry, which is dominated by a few large banks. Using a conjectural variation approach, I estimate a structural model to examine the market conduct of the largest banks for the period 1988-2009. Estimation results suggest that the Turkish banks colluded in the loan market during the sample period where the average mark-up is estimated to be in the range of 44% to 86% depending on the empirical specification. This evidence demonstrates a conflict between market concentration and competition in the Turkish banking industry. Thus, regulatory agencies should be cautious against attempts to increase concentration in the banking industry.

Upcoming Drifts In Bio-Similars

2020 ◽  
Vol 15 ◽  
Author(s):  
Geeta Aggarwal ◽  
Manju Nagpal ◽  
Ameya Sharma ◽  
Vivek Puri ◽  
Gitika Arora Dhingra
Keyword(s):  
Metabolic Diseases ◽  
Market Competition ◽  
Current Status ◽  
Medicinal Products ◽  
The Past ◽  
Biologic Activity ◽  
Emerging Trends ◽  
Regulatory Guidelines ◽  
Food Drug Administration ◽  
Insight Into

Background: Biopharmaceuticals such as Biologic medicinal products have been in clinical use over the past three decades and have benefited towards the therapy of degenerative and critical metabolic diseases. It is forecasted that market of biologics will be going to increase at a rate of 20% per year, and by 2025, more than ˃ 50% of new drug approvals may be biological products. The increasing utilization of the biologics necessitates for cost control, especially for innovators products that have enjoyed a lengthy period of exclusive use. As the first wave of biopharmaceuticals is expired or set to expire, it has led to various opportunities for the expansion of bio-similars i.e. copied versions of original biologics with same biologic activity. Development of biosimilars is expected to promote market competition, meet worldwide demand, sustain the healthcare systems and maintain the incentives for innovation. Methods: Appraisal of published articles from peer reviewed journals, PubMed literature, latest news and guidelines from European Medicine Agency, US Food Drug Administration (FDA) and India are used to identify data for review. Results: Main insight into the quality requirements concerning biologics, current status of regulation of biosimilars and upcoming challenges lying ahead for the upgrading of marketing authorization of bio-similars has been incorporated. Compiled literature on therapeutic status, regulatory guidelines and the emerging trends and opportunities of biosimilars has been thoroughly stated. Conclusion: Updates on biosimilars will support to investigate the possible impact of bio-similars on healthcare market.

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