Evaluation of the Market Structure in Iran’s Banking Industry

Pourebadollahan Covich, Mohsen; Fallahi, Firouz; Ebrahimi, Hossein

doi:10.30473/indeco.2020.7416

Document Type : applicative

Authors

¹ DepAssociate Professor, Department of Economic Development and Planning, Faculty of Economics and Management, University of Tabriz

² Associate Professor, Department of Economic Development and Planning, Faculty of Economics and Management, University of Tabriz

³ Ph.D. Student of Industrial Economics, Department of Economic Development and Planning, Faculty of Economics and Management, University of Tabriz

https://doi.org/10.30473/indeco.2020.7416

Abstract

In the present study, the market structure of Iran’s banking industry is evaluated by using two measure of concentration and competition during the period of 2008- 2017. For this purpose, the k firm Concentration Ratio, the Herfindahl- Hirschman, the Hannah- Kay, the Hall-Tideman, the Comprehensive Industrial Concentration, and the Entropy are used to measure concentration. In addition the Panzar-Rosse statistic is used to evaluate competition in Iran's banking sector. The various concentration indexes calculated based on total assets, total loans and total deposits of the 19 under study banks had an almost declining trend, which indicate that Iran’s banking industry has been moving towards competitive conditions. It is while, the estimated Panzar- Rosse statistic, as a competition index, had a fluctuating trend during the under study period and indicates the existence of a monopoly competition in the Iran's banking industry. A positive and strong correlation between different concentration indexes, along with a negative and weak correlation between different concentration indexes and the Panzar-Rosse statistic, besides the shortcomings of the structural approach to measure competition, show that the use of a non-structural approach, such as the Panzar-Rosse is more suitable for evaluating the Iran's Banking Industry.

Keywords

20.1001.1.24767077.1399.4.13.1.3

References

پورعبادالهان کویچ، محسن؛ محمدزاده، پرویز؛ فلاحی، فیروز و صمد حکمتی فرید (1392). "بررسی شاخص‌های مختلف تمرکز در صنعت سیمان کشور". فصلنامه پژوهش‌های اقتصادی کاربردی، 1(2) ، صص 88-71.

خداداد کاشی، فرهاد (1394). "اقتصاد صنعتی (نظریه و کاربرد)". انتشارات سمت، چاپ پنجم، 66.

دفتر مطالعات اقتصادی وزارت بازرگانی (1387). "بررسی ساختار (اندازه‌گیری تمرکز) در صنعت بانکداری ایران و هزینه‌های اجتماعی انحصار آن". وزارت بازرگانی، معاونت برنامه ریزی و امور اقتصادی.

شریفی نیا، حسین؛ مومنی وصالیان، هوشنگ؛ دقیقی اصلی، علیرضا؛ دامن کشیده، مرجان و مجید فشاری (1399). "ارزیابی قدرت رقابتی در نظام بانکداری ایران (رهیافت پانزار و راس)". فصلنامه مدیریت کسب و کار، 12(45)، صص 185-165.

شهیکی تاش، محمدنبی و کامران محمدپور (1393). "ارزیابی ساختار بازار سپرده‌های بانکی در ایران". فصلنامه مدلسازی اقتصادی، 9 (3)، صص 81-64.

شهیکی تاش، محمدنبی و یعقوب عبدی (1395). "سنجش اندازه رقابت در صنعت بانکداری ایران بر اساس رویکرد پانزار- راس". پژوهش های اقتصاد صنعتی ایران ، 1(2)، صص 143-123.

طاهری تفرشی، سیدرضا (1389). "تأثیر ورود بانک‌های خصوصی بر ساختار عملکرد نظام بانکی در ایران". پایان نامه کارشناسی ارشد موسسه عالی بانکداری ایران.

نجارزاده، رضا؛ عزتی، مرتضی و هادی میرزانژاد (1391). "ارزیابی رقابت پذیری بازار بانکی ایران با استفاده از مدل پانزار و راس". فصلنامه پژوهشهای اقتصادی ایران، 17 (51)، صص 176-157.

Acikalin, S. and L. Sakinc (2015). “Assessing competition with the Panzar-Rosse model in the Turkish banking sector”. Journal of Economics Bibliography, 2(1), pp. 18-28

Baicu, C. G. (2012). “Financial crisis, regulation and competition: the Romanian banking experience”. Procedia Economics and Finance, 3(1), pp. 426-431.

Bikker, J. and K. Haaf (2002a). “Competition, concentration, and their relationship: an empirical analysis of the banking industry”. Journal of Banking and Finance, 26(11), pp. 2191–2214.

Bikker, J. and K. Haaf (2002b). “Measures of competition and concentration in banking industry: A review of the literature”. Economic & financial modeling, 9, pp. 1-46.

Claessens, S. and L. Laeven, (2003). “What drives bank competition? Some international evidence”. World Bank Policy Research Working Paper.

Coccorese, P. (2004). “Banking competition and macroeconomic condition: A disaggregated analysis”. International Financial Markets, 14(3), pp. 203-219.

Gutierres, R. (2007). “Testing for competition in Spanish banking industry: The Panzar-Rosse approach revisited”. Banco de España Research Paper, 726(3), pp. 27-58.

Panzar, J. C., and Rosse, J. N. (1987). “Testing for monopoly equilibrium”. The Journal of Industrial Economics, 35(4), pp. 443–456.

Parkin, M. (2000). “Economics”. University of Western Ontario.

Prayoonrattana, J., Laosuthi, T. and B. Chaivichayachat, (2020). “Empirical measurement of competition in the Thai banking industry”. Department of Economics, Kasetsart University, 44(8), pp.1-20.

Shaffer, S. (1982). “A non-structural tests for competition in financial markets in bank structure and competition”. Conference Proceedings, Federal Reserve Bank of Chicago, pp. 225-243.

Simbanegavi, W., Greenberg, J. and T. Gwatidzo (2014). “Testing for competition in South African banking sector”. Journal of African Economies, 24(3), pp. 303-324.

Stavark, D. and I. Repkova, (2011). “Estimation of the competitive Conditions in the Czech banking sector”. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 59(2), pp. 299-305.

Turk-Ariss, R. (2009). “Competitive behavior in Middle East and North Africa banking systems”. The Quarterly Review of Economics and Finance, 49(2), pp. 693-710.

Tushaj, A. (2010). “Market concentration in the banking sector: Evidence from Albania. In BERG working paper series on government and growth”. Bamberg Economic Research Group, Bamberg University.

Journal of Industrial Economics researches

Evaluation of the Market Structure in Iran’s Banking Industry

References

References

Volume 4, Issue 13
October 2020
Pages 11-26

Evaluation of the Market Structure in Iran’s Banking Industry

References

References

Volume 4, Issue 13October 2020Pages 11-26

Volume 4, Issue 13
October 2020
Pages 11-26