Credit market structure and strategic collateral provision

This paper analyzes the level of the efficiency and competition (market structure) of ASEAN-5 banking industry from 2005 until 2016. Two methods were employed, i.e. Stochastic Frontier Analysis and Adjusted Lerner Index. The former is utilized to measure the bank efficiency in ASEAN-5 countries and the latter is applied to measure the bank competition (market structure) in ASEAN-5 banking industry. In order to connect the efficiency and competition level of ASEAN-5 banking industry, this study also utilizes quadrant analysis based on three different periods, namely the period before the global crisis (2005-2008), the period after global crisis (2009-2015), and the period after the establishment of ASEAN Economic Community –AEC- (2016). The results reveal that on average, the efficiency and the competition level of banks in ASEAN-5 countries are found to be relatively high. The competition in ASEAN-5 banking industry could be classified as monopolistic where each bank competes by diversifying their products or segments.

We attempt to assess borrowers’ credit worthiness in three scenarios one heralding prevalence of information asymmetries the second heralding absence of information asymmetries and the third a realistic scenario encompassing both features for the sake of determining which one gives the best outcome in terms of goodness of fit and adequacy of the model specification with the corresponding market structure of the credit market in purview. The added value of this research is that, when we want to estimate any entity, the explanatory variables carrying market imperfections must be manifested and not implicitly invocated because of the endogeneity of market imperfections and the market structure should be specified clearly; otherwise, the estimation is inadequate and the empirical results do not correspond to the theoretical predilections. In other words, the conformity of empirical results with theoretical predilections does not rely on the absence of information asymmetries, whose full recognition does not introduce spuriousness into empirical results. The research is a comparative cross investigation of scenarios highlighting the best fit to borrowers' Creditworthiness assessment and deducing through logical analysis the role payed by information asymmetries and the banking market power in shaping this fit.

This study aims to evaluate the competitiveness in European banking industry. For this purpose, 5 European countries, which have the highest GDP, are considered in this study that are Germany, France, United Kingdom, Italy, and Spain. Moreover, 6 different criteria are selected based on the literature review. Fuzzy AHP method is considered to understand the significance of the dimensions and criteria. On the other side, fuzzy TOPSIS model is used to rank these 5 European countries according to competitiveness in the banking industry. The findings show that low cost is the most significant criterion for this condition. In addition to this issue, it is also concluded that Germany and France are on the first ranks regarding the competitiveness in the banking industry. Hence, it is recommended that European banks should firstly concentrate on the cost effectiveness in order to increase the competitive power. In this framework, a detailed analysis should be conducted to understand which cost types are greater in comparison with the others. Hence, it can be possible to minimize the costs of the banks so that these banks can offer lower prices to their customers. This situation has a positive impact on the competitive power of the banks.

The importance of distribution of income and structure of credit market as factors responsible for this crisis is brought out more precisely in this chapter, where the results of this model are compared with those of a hypothetical situation involving a more equal distribution of income and a more perfect credit market. It is shown that the two crucial issues—equalisation of income and perfection of the rural credit market—are essentially interconnected. It is therefore not possible to lessen this imperfection without improving the equality-content of distribution of income.

In light of the ongoing extensive discussion concerning the increasing financial risk levels of the household sector in modern, credit-based societies, this study explores the level and structure of credit markets in nineteenth century Sweden. The growing international research focusing on informal credit markets outside formalised institutions has demonstrated that credit was abundantly and pervasively included in the lion’s share of all inter-personal financial relationships in early modern Europe. In this particular study, based on probate inventories and the inverted mortality method, the changing structure of nineteenth century credit market is estimated for the living population. The household financial situation is studied as life-cycle indebtedness and as debt ratios in relation to income, wealth and financial assets and how these ratios evolved during the transformation from a predominately agrarian to a more commercialised, monetised and industrialised economy in Sweden during the nineteenth century. The source material for this article consists of more than 5800 household probate inventories from Southern and Central Sweden, including three rural and two urban areas. The geographical selection is based on a sample utilised in a wider research project. It permits comparisons of debt structures not only between rural and urban areas, but also among different regions within Sweden.

This study investigates how regulatory ability and banking market structure affect explicit deposit insurance scheme (eDIS) adoption and banks’ risk taking under eDIS. We find that: (i) The regulatory ability exists a threshold if the government regulator’s regulatory ability above the threshold, the implicit deposit insurance scheme (iDIS) is not the optimal choice. (ii) Excessive competitive banking market structure leads to the existence of an invalid region of both eDIS and iDIS, in which the bank takes extreme risk. (iii) In the valid region of eDIS, the bank takes excessive risk and the effects of banking market structure and regulatory ability on the bank’s risk are interdependent. Empirical analysis on 190 countries worldwide 1996-2011 confirms that regulatory ability is the determinant of eDIS adoption, whereas the more competitive banking market structures are more prone to experience a banking crisis. The results also indicate a negative effect of regulatory ability on banking risk, and the effect of market structure on banking risk is negative either, as predicted. Moreover, the results support the prediction that the increase of regulatory ability weakens the negative effect of banking market structure on banking risk.

مطابق با بررسی ساختار بازار پسته در ایران، وجود مشکلاتی چند در این محصول موجب ایجاد قدرت انحصاری برخی شرکت ها در تعیین قیمت این محصول در بازارهای داخلی گشته است. این مسئله موجب انحراف از بهینة اجتماعی و ایجاد اثراتی در رفاه اقشار مختلف جامعه می گردد. لذا در مطالعة حاضر با استفاده از اطلاعات سال 1389، با هدف بررسی وجود یا عدم وجود انحصار در بازار پسته و سنجش اثرات رفاهی برقراری یا کاهش چنین انحصاری بر عرضه کنندگان و مصرف کنندگان پسته در ایران، مدل تعادل فضایی که مبنای آن حداکثرسازی خالص رفاه اجتماعی است، مورد استفاده قرار گرفت. مطابق با نتایج این تحقیق، ساختار بازار پسته در ایران به واقع با رقابت کامل فاصله داشته و ایجاد شرایط بازار رقابت کامل موجب افزایش تقریبا دو برابری در رفاه مصرف کنندگان و کاهش 13/0 درصدی در رفاه عرضه کنندگان این محصول می گردد. در مجموع تغییرات ساختار بازار داخلی پسته اثرات قابل‌توجهی بر مصرف کنندگان داخلی این محصول می گذارد ولی عرضه کنندگان این محصول به دلیل صادرات بخش اعظم پسته به کشورهای خارجی، کم‌تر تحت تأثیر قرار می گیرند. با توجه به نتایج این تحقیق پیشنهاد می شود با مهیا سازی شرایط لازم جهت ایجاد بازار رقابت کامل، نظیر راه اندازی بورس پسته، موجبات کاهش نوسان قیمت و در نتیجه حمایت از مصرف کنندگان داخلی محصول مذکور را نیز فرآهم آورد.

Most literature on market competition in the banking industry neglects to address strategic interaction among banks. This paper studies interaction among Chinese banks by dividing banks into two groups: dominant banks (the “Big 5” state‐owned banks) and small‐ and medium‐sized banks (joint‐stock banks and large city commercial banks). We test an oligopolistic model with conjectural variation developed by Spiller and Favaro (1984). Using data from 2007 to 2016, we find that banking competition is not in the form of Stackelberg competition per se. Some strategic interactions exist between small‐ and medium‐sized banks and the largest state‐owned bank. We also study the effect of interest rate deregulation on oligopolies' strategic interactions. Our results show that interest rate deregulation stimulates banking competition by reducing collusiveness among the dominant state‐owned banks and enhancing the market power of small and medium banks.

The objective of this study is to measure the degree of competitiveness in banking industry in Indonesia, after series of changes triggered by economic crises, such as number of banks, bank’s asset composition, and degree of concentration. The degree of competition in banking industry in Indonesia will be estimated using Panzar-Rosse model. Variable chosen as dependent variable is ratio of interest income to total asset. While independent variables used in this model are ratio of interest charges to total fund, ratio of personnel cost to total asset, and ratio of physical capital cost to total asset. These three variables used as main input. This model also uses several controlling variables. From the three main inputs, we can compute value of H-statistic which is used as degree of competition indicator. Estimation result showed that degree of competition of banking industry in Indonesia is toward monopolistic competition. The degree of competition from recent years also show a higher value than preceding years. The degree of competition between small banks also higher than in large banks.

The Iranian banking sector has undergone huge and substantial reform in the last decade;¬ privatization¬, establishment of private banks and development of modern technologies (IT). Based on a sample of 19 banks, This paper investigates the competitive condition of the Iranian banking industry over the period 2005-2010 using the H-statistic proposed by Panzar and Rosse.. The properties of this non-structural methodology (e.g. using firm level data, robustness in small samples, no need to specify a relevant market, etc.) make it an excellent framework for assessing the degree of competition in the banking industry. To estimate H-statistic Panel date approach has been used. The estimated H statistics for the whole sample period is 0/7101 and the Wald test for the market structure of monopoly or perfect competition is rejected and implying that the banks earned their revenues in the condition of monopolistic competition. Key words: Competition, Panzar-Rosse, Market structure, Iranian banking industry.

The size of the profit in a firm or a production system not only depends on the quantity of inputs and outputs, but also depends on the market structure that means the market is perfect competition or imperfect competition. In general, the relationship between output and inputs can be defined as the production structure, which is usually decided by production technology. Therefore, under the market economy system, the production structure regulation has to follow the market structure variation. Here we assume that production technology is a C-D function, and then to determine the effects of different market structures, which we find, they are in close contacted with both production and market structures, especially some variations of elasticities. Through out a series of deduction and equilibrium analysis, the restricted conditions of the maximum profit have been found. Therefore, the consequences show that the values of elasticities have taken an important role in profit obtained for producer, the profits in a perfect competition market hardly depends on market demand elasticity, in which production elasticity requires rather small. However, in the imperfect competition market, monopoly make both price of demand and production elasticities impact on the profit. Those also prove that market monopoly factors make production lose efficiency, or lead to the market failure. In the actual process of production and management, production elasticities and related market information should be strengthened for measurement, which will be useful for analysis price fluctuation risk and management decision.

The paper analyses the effects of competition and regulation policies on competitiveness. In the first part of the paper the literature on the welfare effects of competitive-enhancing policies is discussed. The conclusion of such literature is that a negative relationship between concentration and welfare does not always hold. Asymmetric information and other market failures could determine a positive relationship between concentration and welfare. The second part of the paper develops a model to show that regulation of a vertical integrated monopoly in a country is not necessary if there when competition between countries in final products (services) market. The last part of the paper analyses the methodological problems that arises when is empirically evaluated the effect of concentration on industrial sectors competitiveness.

Effect of market structure on renewable energy Development—A simulation study of a regional electricity market in China

This article provides empirical evidence on the effects of alternative market structures and ownership modes on prices and service offerings in the cable television industry. We analyze the underlying characteristics and behavior of competing versus monopoly operators on the one hand, and privately versus nonprivately owned operators on the other. We find that competition and nonprivate ownership are associated with lower prices for basic cable television service. We also find that cable television price and quality differentials vary with certain characteristics of competing operators, and that market structure and ownership status influence changes in price and quality over time.

THE theoretical and empirical investigations of the relationship between market structure and the firm's incentive to invent and innovate have concentrated on the effects of the structure of the supply side of the market. This focus on the supply side originated in Schumpeter's controversial hypothesis that current market power provided the necessary conditions and future market power provided the incentive for technical change (Schumpeter, 1950). This hypothesis stimulated a vast number of theoretical refinements and empirical tests of relations between research and development activity (R&D) and supply side characteristics such as concentration, firm size, and diversification. This literature has been well summarized by Kamien and Schwartz (1975) and Scherer (1980). The analysis of the effects of the buyer market structure on the selling industry conduct and performance has been limited, both theoretically and empirically. Stigler (1964) modeled the effects of the size distribution of buyers on price competition in oligopoly. Telser (1964) devel-, oped a theory of messages in which he suggested that advertising would increase when buyers were many and small. Lustgarten (1975) tested the effects of buyer market structure on price cost margins and advertising and found the relations suggested by Stigler and Telser. Invention and innovation are forms of competition which, like price and advertising, will be affected by both buyer market structure and seller market structure. However, unlike price and advertising competition, there have not been explicit attempts to establish theoretical and empirical relations between buyer market structure and inventive and innovative activity. The effects of buyer market structure on the selling industry's incentive to invent and innovate is relevant to interpreting the effects of seller market structure on this effort. A number of previous studies of the effects of seller market structure on technical change have found that seller concentration may have a slight positive impact on inventive and innovative effort (Kamien and Schwartz, 1975, p. 20). Even this weak relation may be due to not controlling for buyer market structure. If Galbraith's (1952) countervailing power hypothesis is correct (Lustgarten, 1975, p. 128), concentration in the buyer and seller markets may be positively correlated. If buyer market concentration is positively related to inventive and innovative effort in the selling industry, the empirical estimate of the partial effect of seller concentration will be biased upward. This paper investigates the effect of buyer market structure on R&D effort. Section II draws together the literature that is relevant to the issue of the relation between buyer market structure and seller inventive and innovative activity. Section III develops a simultaneous equation model of R&D activity where R&D, advertising and concentration are endogenous variables. Section IV uses data on scientific and engineering inputs to test this model. Section V summarizes these results.