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Competition in the Polish banking market prior to recent crisis for the period 1997–2007 – empirical results obtained with the use of three different models

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  • Małgorzata

    (National Bank of Poland)

Abstract

The aim of this analysis is to assess the changes in the measures of competition of the Polish banking sector in the period between 1997–2007 (before the financial crisis) with the use of quantitative methods based on the theory of competition measurement in the banking sector (the Industrial Organisation Approach to Banking). In this paper three models have been used for the evaluation of competition: the Panzar and Rosse model (P-R), the Lerner index (LI) and the Boone indicator (BI). Empirical analysis shows that the degree of competition in the Polish banking market in the period between 1997–2007 followed a slight upward trend. This results are confirmed by the Panzar and Rosse model (P-R), the Lerner index (LI) and the Boone indicator (BI). The same channels (increase in mergers and acquisitions and deregulation) which had an impact on changes in the competition of banking sectors in the euro zone countries, had an impact on the Polish banking sector due to the involvement of the capital from the euro zone.

Suggested Citation

  • Małgorzata, 2011. "Competition in the Polish banking market prior to recent crisis for the period 1997–2007 – empirical results obtained with the use of three different models," Bank i Kredyt, Narodowy Bank Polski, vol. 42(5), pages 5-40.
    • Handle: RePEc:nbp:nbpbik:v:42:y:2011:i:5:p:5-40
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    References listed on IDEAS

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    Cited by:

    1. Memić Deni, 2015. "Banking Competition and Efficiency: Empirical Analysis on the Bosnia and Herzegovina Using Panzar-Rosse Model," Business Systems Research, Sciendo, vol. 6(1), pages 72-92, March.
    2. Malgorzata Pawlowska, 2015. "The impact of market structure and the business cycle on bank profitability: the role of foreign ownership. The case of Poland," NBP Working Papers 229, Narodowy Bank Polski.

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    More about this item

    Keywords

    competition; concentration; mergers and acquisitions; market structure; Panzar-Rosse model; Lerner index; Boone indicator;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G2 - Financial Economics - - Financial Institutions and Services
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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