Abstract
In the banking industry, the structure-performance relationship has frequently been evaluated with results suggesting that collusive profits occur. These studies have been criticized for inappropriately accounting for entry barriers,ad hoc assumptions concerning the appropriate structure measure, limited samples, and ignoring firm efficiency differences. We address these concerns and find categorical support for the efficient structure hypothesis, and limited support for the traditional structure-collusion hypothesis when markets are characterized by significant entry barriers. The findings suggest the competing hypotheses may actually be complementary theories, and the negative role of entry barriers may be more important than previously thought.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.