When Measuring the Same Leads to Different Conclusions – A Critical Review of Measures Applied to Assess the Degree of Competition in Banking Systems

Artikel

Economic studies on the degree of competition (DC) in banking systems use various measures which are subsumed under the 1) structure- (e.g. Herfin­dahl-Hirschman index), 2) conduct- (e.g. Boone indicator) or 3) performance-oriented approach (e.g. Lerner index). Yet, the respective empirical operationali­zations of the different DC measures are expected to represent one central construct – the true DC of a banking system. We review 35 studies covering 15 European banking systems from 1998 to 2007. Contrasting the central construct hypothesis, we find substantial differences in the produced DC measures. Thus, the economic validity of derived conclusions regarding the competition intensity is challenged.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Credit and Capital Markets – Kredit und Kapital ; ISSN: 2199-1235 ; Volume: 53 ; Year: 2020 ; Issue: 1 ; Pages: 43-80

Classification and Topics

• Classification: Wirtschaft ; Interest Rates: Determination, Term Structure, and Effects ; Monetary Policy ; Central Banks and Their Policies ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: Lerner index ; Boone indicator ; H statistic ; CH3 ; Competition measurement ; Central construct hypothesis ; Degree of competition (DC) ; SCP paradigm ; European banking system ; Banking industry

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Richter, Toni ; Müller, Holger ; Gischer, Horst
• Event: Veröffentlichung
• (who): Duncker & Humblot
• (where): Berlin
• (when): 2020

Further information

• DOI: doi:10.3790/ccm.53.1.43
• Last update: 10.03.2025, 11:41 AM CET