Market structure and competitiveness of Credit Associations and Credit Cooperatives in Japan

Abstract

This paper investigates how the consolidation process has affected the market structure and the degree of competition within Credit Associations (CA) and Credit Cooperatives (CC) in Japan. From the estimated results, I tentatively find they operate in an environment without collusive behaviour. The magnitudes of competitiveness by H–statistics suggest mutual financial institutions do not necessarily make decisions only for their own benefit but also consider the social welfare in their community. These results represent the geographical restriction to mutual financial institutions affects to the competitiveness, but the other factors such as good corporate governance relate to the market structure.