Testing for competition in Serbian banking industry: The Panzar-Rosse approach

Babić, Aljoša; Zildzovic, Emir; Lončar, Dragan

doi:10.5937/industrija43-7648

Cited by 4 publications

(3 citation statements)

References 38 publications

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“…Their results suggest moderate to highly concentrated market according to CR5 and no market concentration to moderate concentration according to HHI. Babić, Zildžović & Lončar (2015) used Panzar-Rosse model to analyse the level of competitiveness in the Serbian banking sector in the period 2004-2012. In this period, 31 banks operated on the Serbian market and each bank had asset share lower than 15%.…”

Section: Literature Reviewmentioning

confidence: 99%

Comparative Analysis of the Banking Sector Competitiveness in Serbia and Montenegro

Grubišić

Kamenković

Kaličanin

2021

Journal of Central Banking Theory and Practice

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Central banks often use certain concentration indices in their official reports to determine the degree of intensity of competition, of which the most common are the concentration ratio and the Herfindahl-Hirschman index. It is important to emphasize that when calculating the value of these indices, the National Bank of Serbia most often uses the absolute value of assets. In addition to the mentioned indices, the values of the Gini coefficient, Entropy coefficient, Rosenblatt index and graphical representation of the Lorenz curve in the period 2015–2019 are presented in this paper, using the balance sheet position loans and receivables from customers, but not including loans and receivables from banks and other financial organizations. The results of the static and dynamic analysis of concentration indicate that, compared to Montenegro, the banking sector of Serbia is characterized by a larger number of banks, less concentration on the market, and stronger intensity of competition. Although market changes are reflected in a reduced number of banks while a change in the dispersion of market shares affected the change in the market structures of the banking sectors, instability and uncertainty of the analysed sector remained unchanged in the case of both countries.

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Section: Literature Reviewmentioning

confidence: 99%

Comparative Analysis of the Banking Sector Competitiveness in Serbia and Montenegro

Grubišić

Kamenković

Kaličanin

2021

Journal of Central Banking Theory and Practice

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“…The nonstructural studies (e.g., Rodriguez, Bolivar, & Reyes, 2018;Demirel & Hatirli, 2017;Bikker, Shaffer, & Spierdijk, 2012;Aktan & Masood, 2010;Gischer & Stiele, 2008;Casu & Giradone, 2006) rely on Bresnahan-Lau model, Lener index, and the Panzar-Rosse model. Typically, studies of this nature identify the industry as monopolistically competitive, however, some characterize it as perfectly competitive (e.g., Shaffer, 1993;Nathan & Neave, 1989), oligopoly (e.g., Babic, Zildzovic, & Loncar, 2015;Mensi, 2010), or monopoly (e.g., Mustafa & Toci, 2017). The structural approach relies on proxies such as Herfindahl-Hirschman Index (HHI) and concentration ratio of n firms (CR n ) to elucidate the level of competition in the industry (Nguyen, 2019;Bikker, Shaffer, & Spierdijk, 2012;Berger, Demirguc-Kunt, Levine, & Haubrich, 2004).…”

Section: Literature Reviewmentioning

confidence: 99%

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Oredegbe¹

2020

IJEF

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This study investigates the Canadian banking industry profitability and seeks to determine if there is evidence of market power hypothesis (MPH) and/or efficiency structure hypothesis (ESH) in the industry. Using GMM and data from 2006 to 2018, it finds no support for the structure-conduct-performance (SCP) component of MPH. However, evidence of relative market power (RMP) in the industry reflects partial support for MPH, implying that banks that offer differentiated products are able to exercise market power, increase market share, and achieve better profitability. The lack of support for X-efficiency (ESX) and scale efficiency (ESS), which are components of ESH, indicates no support for the ESH. The finding that QLH holds in the industry suggests the level of competition is inadequate and that managers in the industry exhibit suboptimal behaviour. Therefore, increasing the level of competition in the industry will stimulate managerial effectiveness. Findings relating to the control variables show that spread impedes profitability, whereas capitalization and the joint influence of spread and liquidity risk have facilitating effects. Credit risk is immaterial to profitability however, the effect of economic growth can be positive. This study provides a better understanding of the industry, which is important to managers, regulators, and policy makers. The robustness checks affirm the consistency of the findings and policy implications.

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“… See Ristić and Trifunović (2014) for more details concerning this issue andMiljković, Tanasković and Filipović (2013) as well asBabić, Zildžović and Lončar (2015).…”

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confidence: 99%

Network externalities in telecommunication industry: An analysis of Serbian market

Trifunović¹,

Mitrovic²

2016

Industrija

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This paper deals with network competition and provides empirical analysis of market concentration, network and call externalities, access pricing, price discrimination and switching costs in Serbian mobile phone telecommunications market. It is shown that network externalities governed the expansion of this market until 2008. Upon entry of VIP incumbents didn't engage in predatory behaviour towards entrant aiming to benefit from lockedin users. The policy of mobile phone number portability reduced on-net prices and substantially increased consumer's surplus. In contrast to some previous research, this policy was pro-competitive in Serbia. We have also determined that users of the network with the largest market share benefit the most from call externalities. Finally, one network does not price discriminate between outgoing and incoming roaming calls, which implies that users of this network have higher level pecuniary externalities in roaming compared to users of price discriminating networks.

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Testing for competition in Serbian banking industry: The Panzar-Rosse approach

Abstract: The level of competitiveness in Serbian banking industry is tested using the Panzar-Rosse model on bank level data in period from

Cited by 4 publications

References 38 publications

Comparative Analysis of the Banking Sector Competitiveness in Serbia and Montenegro

Comparative Analysis of the Banking Sector Competitiveness in Serbia and Montenegro

Canadian Banking Industry Profitability: Exploring the Relevance of Two Competing Hypotheses

Network externalities in telecommunication industry: An analysis of Serbian market

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