Degree of Concentration of the Banking Sector in B&H and the Impact on the Prices of Banking Products

AbstractThis paper tends to examine the level of concentration of the banking sector in Bosnia and Herzegovina. The main objective of the paper is to measure the level of concentration and to investigate how the concentration and type of market structure affect the prices of banking products. By monitoring the movement of key indicators, it provides an insight into the state of the B&H banking sector. By using the appropriate index (HHI, CR3), the movement of concentration levels and the shape of the market structure that prevailed in the banking market over a period of time were determined. The results show that there is a moderate concentration in the B&H banking sector, which includes monopolistic competition as a form of market structure. This means that the equilibrium level of production is achieved at a lower volume of production, at higher prices for banking products (above marginal costs), thereby reducing consumer surplus relative to a perfectly competitive market

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The Degree of Competition in the UAE Banking Industry

International Finance and Banking ◽

10.5296/ifb.v4i2.11593 ◽

2017 ◽

Vol 4 (2) ◽

pp. 1

Author(s):

George Owusu Antwi ◽

Rachna Banerjee ◽

Amal Abeer Mohammed ◽

Mariam Juma Muna-Habib

Keyword(s):

Market Structure ◽

Banking Sector ◽

Monopolistic Competition ◽

Banking Industry ◽

Balance Sheet ◽

Competitive Environment ◽

Input Price ◽

Financial Products ◽

Long Run ◽

Banking Market

This paper has made an attempt to assess the degree of competition (or market structure) in the UAE banking sector using the H-statistics established by Panzar-Rosse (1987). Data of six years (2009-2015) have been extracted from various balance sheet and income statements of the banks. Pooled OSL estimator was used to obtain the coefficient. The inputs prices were found to be significant except the input price of labor. Total asset was registered to be positively significant. All other variables were not significant. The results of the study reveal that the UAE banking market structure is characterized by the monopolistic competition. That is, banks earned their revenue as if operating under conditions of monopolistic competition during this period. A robust check was performed to test for validity of PR-model. The results yield E-statistic which is consistent with long-run equilibrium. It is believed that both the small and the larger banks operate relatively equal more in a competitive environment. We recommend that UAE should develop new financial products and services that will provide convenience to customers while improving profitability.

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Banking Competition and Efficiency: Empirical Analysis on the Bosnia and Herzegovina Using Panzar-Rosse Model

Business Systems Research Journal ◽

10.1515/bsrj-2015-0005 ◽

2015 ◽

Vol 6 (1) ◽

pp. 72-92 ◽

Cited By ~ 4

Author(s):

Deni Memić

Keyword(s):

Market Structure ◽

Bosnia And Herzegovina ◽

Banking Sector ◽

Monopolistic Competition ◽

Scientific Literature ◽

Monopoly Power ◽

Banking Competition ◽

Banking Market ◽

Bank Concentration

Abstract Background: Competition in the banking industry has been an important topic in the scientific literature as researchers tried to assess the level of competition in the banking sector. Objectives: This paper has an aim to investigate the market structure and a long term equilibrium of the banking market in Bosnia and Herzegovina nationwide as well as on its constitutional entities as well as to evaluate the monopoly power of banks during the years 2008-2012. Methods/Approach: The paper is examining the market structure using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) as well as evaluating the monopoly power of banks by employing Panzar-Rosse “H-statistic”. Results: The empirical results using CRk and HHI show that Bosnia and Herzegovina banking market has a moderately concentrated market with a concentration decreasing trend. The Panzar-Rosse “H-statistic” suggests that banks in Bosnia and Herzegovina operate under monopoly or monopolistic competition depending on the market segment. Conclusions: Banks operating on the banking market in Bosnia and Herzegovina seem to be earning their total and interest revenues under monopoly or perfectly collusive oligopoly.

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Banking market structure and efficiency: an assessment of the USA and Canada

Journal of Economic Studies ◽

10.1108/jes-03-2021-0157 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Salah U-Din ◽

David Tripe

Keyword(s):

Market Structure ◽

Market Power ◽

Negative Impact ◽

Positive Impact ◽

Bank Efficiency ◽

Content Type ◽

Frontier Analysis ◽

Banking Market ◽

Cost Efficient ◽

The Impact

PurposeThe study aims to analyze the changes in banking market structure and their impact on the bank efficiency.Design/methodology/approachThis study uses a one-stage stochastic frontier analysis (SFA) to compare the impact of the market structure and the GFC on the economic efficiency of the major banks in both countries.FindingsA significant negative impact of the GFC is observed on bank efficiency. Overall, Canadian banks posted better efficiency scores than their American counterparts. Additionally, cost-efficient banks are found to be more resilient to crises and more profit-efficient in the post-GFC period. The authors found that market power had a positive impact on the cost and profit efficiency of banks. Higher levels of equity, market power and concentration helped banks be more cost-efficient.Research limitations/implicationsOnly large banks are selected for study although it represents the majority stake of both banking sectors.Practical implicationsBanking regulators should include more measures to assess the banking market structure and performance.Originality/valueAs per the best knowledge of the authors, it is the first study to assess the change in banking market structure and efficiency of the US and Canadian banking sectors in the post-GFC period.

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Audio Mining: The Role of Vocal Tone in Persuasion

Journal of Consumer Research ◽

10.1093/jcr/ucab012 ◽

2021 ◽

Author(s):

Xin (Shane) Wang ◽

Shijie Lu ◽

X I Li ◽

Mansur Khamitov ◽

Neil Bendle

Keyword(s):

Empirical Study ◽

Large Scale ◽

Controlled Experiments ◽

The Core ◽

Content Model ◽

Stereotype Content ◽

Key Indicators ◽

The Impact ◽

Insight Into

Abstract Persuasion success is often related to hard-to-measure characteristics, such as the way the persuader speaks. To examine how vocal tones impact persuasion in an online appeal, this research measures persuaders’ vocal tones in Kickstarter video pitches using novel audio mining technology. Connecting vocal tone dimensions with real-world funding outcomes offers insight into the impact of vocal tones on receivers’ actions. The core hypothesis of this paper is that a successful persuasion attempt is associated with vocal tones denoting (1) focus, (2) low stress, and (3) stable emotions. These three vocal tone dimensions—which are in line with the stereotype content model—matter because they allow receivers to make inferences about a persuader’s competence. The hypotheses are tested with a large-scale empirical study using Kickstarter data, which is then replicated in a different category. In addition, two controlled experiments provide evidence that perceptions of competence mediate the impact of the three vocal tones on persuasion attempt success. The results identify key indicators of persuasion attempt success and suggest a greater role for audio mining in academic consumer research.

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Competition in the Indian Banking Sector: A Panel Data Approach

Journal of Risk and Financial Management ◽

10.3390/jrfm12030136 ◽

2019 ◽

Vol 12 (3) ◽

pp. 136 ◽

Cited By ~ 2

Author(s):

Zhiheng Li ◽

Shuangzhe Liu ◽

Fanda Meng ◽

Milind Sathye

Keyword(s):

Public Sector ◽

Panel Data ◽

Foreign Investment ◽

Banking Sector ◽

Monopolistic Competition ◽

Indian Government ◽

Banking Market ◽

Bank Ownership ◽

Policy Measures ◽

Privately Owned

The paper aims to assess the level of competition in the Indian banking sector overall as well as within the three groups of banks: foreign owned, state owned (public sector), and privately owned. We use panel data for the period from 2005–2018. We found that the overall competition in the Indian banking sector is strong, although there are differences by type of bank ownership. The Indian banking market continues to be characterized by monopolistic competition. The various policy measures taken by the Indian government in recent years appear to have helped boost competition. A policy suggestion would be to further liberalize the banking sector for foreign investment.

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Structure, market power, and profitability: evidence from the banking sector in Latin America

Revista Contabilidade & Finanças ◽

10.1590/1808-057x202010490 ◽

2021 ◽

Vol 32 (85) ◽

pp. 126-142

Author(s):

Cristiano Hordones ◽

Antonio Zoratto Sanvicente

Keyword(s):

Latin America ◽

Interest Rates ◽

Market Structure ◽

Market Power ◽

Banking Sector ◽

Banking Industry ◽

Scientific Basis ◽

Performance Model ◽

Panel Data Regression ◽

Banking Market

ABSTRACT The aim of this paper is to evaluate the influence of market structure on the competition between banks and to determine whether competition affects their profitability in different countries in Latin America. The study also seeks to compare, between 16 countries in the continent, the levels of concentration, competition, and profitability of the respective banking sectors. This article fills the research gap regarding the structure and market power of banks in emerging countries, by comparing Brazil with the other countries in the continent. The topic is extremely important at a time of debate about the high interest rates in Brazil, the market structure observed, and the alleged effect of this on the high levels of spread between lending and borrowing rates. The research provides evidence for the debate regarding the structure of the banking industry. To evaluate competition, the Panzar-Rosse model was used. Concentration was measured by the Herfindahl-Hirschman index and CR5 ratio. To verify the link between the variables, the hypotheses of the structure-conduct-performance model were tested, via a sample of 16 countries in Latin America, covering the period from 2011 to 2017, using panel data regression. This study, conducted for the banking industry in Latin America, rejected the premises of the structure-conduct-performance (SCP) model, which affirm that concentration reduces competition, causing higher profitability in the sector. In the comparison of the studied variables between the countries in the continent, Brazil presented the lowest competition index. The concentration and profitability assessments, in turn, presented results in line with the mean. The results of the research serve to elucidate the intense debate regarding the structure of the banking market. Moreover, they serve as a scientific basis for regulators’ actions, aiming to incentivize competition and reduce bank spread.

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IMPACT OF EXOGENOUS SHOCKS ON CONSUMPTION APPROXIMATED BY RETAIL TRADE IN CROATIA

International Journal Vallis Aurea ◽

10.2507/ijva.6.2.2.71 ◽

2020 ◽

Vol 6 (2) ◽

pp. 15-26

Author(s):

Darko Karić

Keyword(s):

Interest Rates ◽

Banking Sector ◽

Paper Analysis ◽

The State ◽

Retail Trade ◽

Exogenous Shocks ◽

Irrational Behavior ◽

Personal Consumption ◽

Banking Market ◽

The Impact

This paper analysis the impact of two different types of exogenous shocks on the consumption, approximated by retail trade in Croatia. The aim of this paper is to show that the crisis caused by financial disturbances and the crisis caused by pandemic have different repercussions on movements of interest rates and further impact on consumption. Banks react differently in a crisis that has no cause in the financial sector compared to the crisis caused by disturbances in the financial and banking market as we had in 2008. Therefore, it will be proven that in crisis of 2020, which is more significant in strength than the crisis in 2009, Croatia has pursued a different economic policy, aimed to retaining jobs and maintaining the level of consumption from pre-recession periods. All mentioned emphasizes two facts: 1. The irrational behavior of the state in a crisis caused by disturbances in the financial and banking sector differs to the state reaction to the crisis caused by a pandemic, that has no financial cause; 2. Fear of negative psychological expectations and falling demand and personal consumption, are the most important components in the GDP structure

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The Effect of Economies of Scope on Iranian Banking Sector Structure: An Application of Multi-Product Function and Multi-Level Effect Approaches

Scientific Annals of Economics and Business ◽

10.2478/saeb-2018-0016 ◽

2018 ◽

Vol 65 (4) ◽

pp. 459-475

Author(s):

Kamran Mahmodpour ◽

Mohammad N. Shahiki Tash ◽

Mohammad Hassan Fotros

Keyword(s):

Market Structure ◽

Cost Function ◽

Banking Sector ◽

Economies Of Scope ◽

Sector Structure ◽

Product Function ◽

Multi Level ◽

The Impact ◽

Level Effect

Abstract This paper investigates, using a multi-product paradigm, the market structure of the Iranian banking sector to evaluate the role of scale. In so doing, we checked for economies of scope by multi-product cost function as well as the impact of potential economies on the banking sector structure including 18 banks during the period 2008–2014. The changes in Panzar-Rosse H-Statistic as a result of the variety in products reflect changes in the monopolistic power. The results show that an increase in the variety of offered products increases banks’ monopolistic power.

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European Banking Integration and Sustainable Economic Growth

Sustainability ◽

10.3390/su12031164 ◽

2020 ◽

Vol 12 (3) ◽

pp. 1164 ◽

Cited By ~ 1

Author(s):

Ovidiu Stoica ◽

Otilia-Roxana Oprea ◽

Ionel Bostan ◽

Carmen Sandu Toderașcu ◽

Cristina Mihaela Lazăr

Keyword(s):

Economic Growth ◽

Banking Sector ◽

Member States ◽

Eu Countries ◽

Eu Member States ◽

Banking Market ◽

European Banking ◽

Main Factors ◽

Sustainable Economic Growth ◽

The Impact

Sustainable economic growth is considered a fundamental problem due to the effects that can be felt on the society as a whole, along with the phenomenon of banking integration that can influence the development of a country’s economy. This research aims to investigate the impact of banking market integration on sustainable economic growth in EU countries, especially in the context of financial integration, a good consolidation of the banking market is needed. We also identified the main factors by which the development of the banking market influences economic growth. The analysis was carried out for the period 2004–2018 in EU countries as a sample. According to the results obtained, we can say that European banking integration has a positive influence and has many benefits on the growth and sustainable development of the economy. The main factors by which banking integration significantly and positively favors economic growth are convergence of asset returns, convergence of interest rates, cross-border lending to the non-banking sector, foreign assets and foreign liabilities), the ratio of international banking activities, the ratio between assets and GDP, and the net interest margin (only when maintaining a low level) with some differences between the pre-crisis and the post-crisis period, the countries in the Euro Zone outside the euro, and the new EU member states and the old EU member states.

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Impact of Mergers and Acquisitions on Operational Performance of Islamic Banking Sector

Journal of South Asian Studies ◽

10.33687/jsas.009.01.3472 ◽

2021 ◽

Vol 9 (1) ◽

pp. 25-36

Author(s):

Nazim Ullah ◽

Fauzias Mat Nor ◽

Junaidah Abu Seman

Keyword(s):

Market Structure ◽

Banking Sector ◽

Negative Impact ◽

Policy Implications ◽

Strategic Decision ◽

Operational Performance ◽

Islamic Banking ◽

Islamic Banks ◽

Operating Income ◽

The Impact

Merger and acquisition (hereafter MA) are the business expansion strategy. Islamic bank is the niche banking sector compared to its peers while it is categorized as too small to succeed. The paper aims to analyze the impact of MA on the operational performance of the Islamic banking sector. This study employs empirical research methods, namely cross-sectional pooled regression and panel data regression to analyze a set of samples consisting of 10 Islamic banks involved in MA from 6 countries, drawn from the International Monetary Fund (IMF), World bank, Ficth Connect, and Bloomberg over the years of 2009Q1to 2018Q4. The operational performance is estimated using accounting-based measures while the Herfindahl-Hirschman Index (HHI) and the concentration ratio (CR) are applied to signify market structure. Total assets, total deposits, and operating income variables are used to represent bank size. The findings indicate that bank size shows a negative impact on operational performance. While the segregated level of bank size which is larger banks and concentrated market structure has a greater impact on the operational performance of Islamic banks in the post-MA period. The paper concludes by discussing policy implications for policymakers and academicians for having the strategic decision on the MA deal and further research.

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