Competitiveness of Indonesian banking industry based on commercial bank business group: Panzar Rosse Model
DOI:
https://doi.org/10.22437/ppd.v7i1.7475Abstract
The present research was aimed to investigating the competitiveness in Indonesian banking sector during the period of 2005 to 2016, to set the limit of the scope of the study a total sample is 84 banks. This research was conducted by grouping banks based on ownership and based on BUKU (General Bank based on Business Activities). The study also aimed to analyze the banking competitiveness based on classification of banks and groups of capital ownership. The study was conducted by evaluating the value of H-statistic for the research model comprising of three input variables, namely funds, labors and capital. The results of the research show that the market of banking industry in Indonesia is classified as monopolistic competition. The limitation of this study is that this study only looks at the competition variable, and has not seen its relationship with other variables. In subsequent studies, it is expected to conduct research related to competition and relate it to other variables, such as market share or level of market concentration.
Downloads
References
Anzoategui, D., PerÃa, M.S.M & Melecky, M. (2012). Bank Competition in Russia: An Examination at Different Levels of Aggregation. Emerging Markets Review, 13 (1), 42–57.
Athoillah, M. (2010). Struktur Pasar Industri Perbankan Indonesia: Rosse-Panzar Test. Journal of Indonesian Applied Economics, 4 (1), 1-10.
Aysan, A., Gunes, A., & Abbasoglu, O. (2007). Concentration, Competition, Efficiency and Profitabliti of the Turkish Banking sector in the Post-Crises Period. Working Papers, Bogazici University, Department of Economics.
Bikker, J.A. & Haaf, K. (2002). Competition, Concentration and their Relationship: an Empirical Analysis of the Banking Industry. Journal of Banking & Finance, 26 (1), 2191-2214.
Bikker, J.A. & Groeneveld, J.M. (2000). Competition and Concentration in the EU Banking Industry, Kredit und Kapital, 33, 62-98.
Casu, B., & Girardone, C. (2006). Bank Competition, Concentration and Efficiency in the Single European Market. The Manchester School, 74 (4), 441- 468.
Claessens, S. & Laeven, L. (2003). What Drives Bank Competition? Some International Evidence. Journal of Money, Credit, and Banking, 36 (3), 563-584.
De Bandt, O. & Davis, E.P., (2000). Competition, contestability and market structure in European banking sectors on the eve of EMU. Journal of Banking & Finance, 24(6), 1045–1066.
Gelos, G. & Roldos, J. (2002). Consolidation and Market Structure in Emerging Market Banking Systems. Working Paper, International Monetary Fund.
Kashi, F.K, Beynabadi, J.Z. & Mosavi, Y., (2015). Competition In Iran’s Banking Sector: Panzar-Rosse Approach. Iran. Econ. Rev. 19(1), 29–39.
Majid,A.M.Z. & Sufian, F. (2006). Consolidation and Competition in Emerging Market: an Empirical Test for Malaysian Banking Industry. Economic Change and Restructuring, 39(1-2), 105-124.
Molyneux, P., Thornton, J. & Lloyd-Williams,D.M. (1996). Competition and Market Contestability in Japanese Commercial Banking. Journal of Economics and Business, 48(1), 33-45.
Mulyaningsih, T. & Daly, A. (2011). Competitive Conditions in Banking Industry: An Empirical Analysis of The Consolidation, Competition And Concentration In The Indonesia Banking Industry Between 2001 and 2009. Buletin Ekonomi, Moneter dan Perbankan, 14(2), 151–186.
Panzar, J. & Rosse, J. (1987). Testing for ‘monopoly’ Equilibrium. Journal of Industrial Economics, 35(4), 443-456.
Rosse, J. & Panzar, J. (1977). Chamberlin vs Robinson: an Empirical Study for Monopoly Rents, Bell Laboratories Economic Discussion Paper.
Shaffer, S. (1982). A non-structural tests for competition in financial markets, Bank Structure and Competition, Conference Proceedings, Federal Reserve Bank of Chicago, Chicago, 225-243.
Shaffer, S. (2004). Patterns of competition in banking, Journal of Economics and Business, 56 (4), 287-313.
Spierdijk, L. & Shaffer, S. 2015. The Panzar-Rosse Revenue Test and Market Power in Banking. Journal of Banking Finance, 61, 340-347
Vesala, J. (1995). Testing for Competition in Banking: Behavioral Evidence from Finland. Finland: Suomen Pankki.
Widyastuti, R.S. & Armanto, B. (2013). Kompetisi Industri Perbankan Indonesia. Buletin Ekonomi Moneter dan Perbankan, 12(1), 129-142.
Yeyati, E.L. & Micco, A. (2007). Concentration and Foreign Penetration in Latin American Banking Sectors: Impact on Competition and Risk. Journal of Banking and Finance, 31 (6), 1633-1647.
Yuan, Y. (2006). The state of competition of the Chinese banking industry. Journal of Asian Economics, 17 (3), 519-534.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2019 Fajra Octrina, Rike Setiawati
This work is licensed under a Creative Commons Attribution 4.0 International License.
