Level of Concentration in Banking Markets and Length of EU Membership
The purpose of this article is to analyze the
degree of concentration in the banking market in EU member
states as well as to determine the impact of the length of EU
membership on the degree of concentration. In that sense
several analysis were conducted, specifically, panel analysis,
calculation of correlation coefficient and regression analysis of
the impact of the length of EU membership on the degree of
concentration. Panel analysis was conducted to determine
whether there is a similar trend of concentration in three
groups of countries - countries with a low, moderate and high
level of concentration. The conducted panel analysis showed
that in EU countries with a moderate level of concentration,
the level of concentration decreases. The calculation of
correlation showed that, to some extent, with other influential
factors, the length of EU membership negatively affects the
market concentration of the banking market. Using the
regression analysis for investigation of the influence of the
length of EU membership on the level of concentration in the
banking sector in a particular country, the results reveal that
there is a negative effect of the length in EU membership on
market concentration, although it is not significantly influential
variable.
[1] F. Allen and D. Gale, D. (2004) Competition and Systemic Stability,
Journal of Money, Credit and Banking 36:3, pp.453-480
[2] M. Canoy, M. Van Dijk, J. Lemmen, R. De Mooij, and J. Weigand,
(2001) Competition and Stability in Banking, CPB Netherlands Bureau
for Economic Policy Analysis Document No. 15, The Hague
[3] E. Carletti and P. Hartmann (2002) Competition and Systemic Stability:
What-s Special About Banking?, in: P. Mizen, (ed.), Monetary History,
Exchange Rates, and Financial Markets: Essays in Honor of Charles
Goodhart, Edward Elgar, Cheltenham, pp. 202-229
[4] X. Freixas and J. C. Rochet (1997) Microeconomics of Banking, MIT
Press, Cambridge, MA
[5] T. F. Hellmann, K. C. Murdock and J. E. Stiglitz, (2000) Liberalization,
Moral Hazard in Banking, and Prudential Regulation: Are Capital
Requirements Enough?, American Economic Review 90:1, 147-165
[6] D. Besanko and A. V. Thakor (1993) Relationship Banking, Deposit
Insurance and Bank Portfolio, in: C. Mayer and X. Vives (eds.), Capital
Markets and Financial Intermediation. Cambridge University Press,
Cambridge, pp. 292-318
[7] C. Matutes and X. Vives (2000) Imperfect Competition, Risk Taking,
and Regulation in Banking, European Economic Review 44, pp.1-34
[8] J. H. Boyd and D. E. Runkle (1993) Size and Performance of Banking
Firms: Testing the Predictions of Theory, Journal of Monetary
Economics 31, pp. 47-67
[9] F. S. Mishkin (1999) Financial Consolidation: Dangers and
Opportunities, Journal of Banking and Finance 23, pp. 675-691
[10] G. Gilles, (2003) The Battle of the Single European Market:
Achievements in Economic Thought, 1985-2000, Kegan Paul, London,
pp.112
[11] J. A. Bikker, (2004) Competition and Efficiency in a Unified European
Banking Market, EE Publishing, pp.49 - 58
[12] W. J. Baumol, and A. S. Blinder, (2007) Microeconomics: Principles
and Policy, Thomson, Mason, pp.277
[13] R. S. Schlossberg (2008) Mergers and acquisitions: understanding the
antitrust issues, American Bar Association, pp.689
[14] A. Griffiths and S. Wall, Intermediate Microeconomics, theory and
applications, Longman, 1996., pp. 325
[15] American Bar Association (2005) Market power handbook: competition
law and economic foundations, ABA Publishing, Chicago, pp.81
[16] W. A. McEachern, (2009) Economics: A Contemporary Introduction,
Southwest Cengage Learning, Mason
[17] European Union: The History of the European Union,
http://europa.eu/about-eu/eu-history/index_en.htm
[18] European Central Bank (2010) EU Banking Structures, ECB, Frankfurt
am Main, pp.36
[19] European Central Bank (2007) EU Banking Structures, ECB, Frankfurt
am Main, pp.53
[20] K. H├╝schelrath, (2008) Competition Policy Analysis: An Integrated
Approach, Physica-Verlag, Heidelberg, pp.183
[21] G. Stone (2007) Core Economics, Worth Publishers, Pennsylvania
[22] P. K. Watson and S. S. Teelucksingh (2002) A practical introduction to
econometric methods: classical and modern, University of the West
Indies Press, Kingston,
[23] J. H. Stock and M. W. Watson (2006.) Introduction to Econometrics,
Addison Wesley, pp.271
[24] J. A. Hausman (1978) Specification Tests in Econometrics,
Econometrica, vol. 46/6, pp.1251-1271
[1] F. Allen and D. Gale, D. (2004) Competition and Systemic Stability,
Journal of Money, Credit and Banking 36:3, pp.453-480
[2] M. Canoy, M. Van Dijk, J. Lemmen, R. De Mooij, and J. Weigand,
(2001) Competition and Stability in Banking, CPB Netherlands Bureau
for Economic Policy Analysis Document No. 15, The Hague
[3] E. Carletti and P. Hartmann (2002) Competition and Systemic Stability:
What-s Special About Banking?, in: P. Mizen, (ed.), Monetary History,
Exchange Rates, and Financial Markets: Essays in Honor of Charles
Goodhart, Edward Elgar, Cheltenham, pp. 202-229
[4] X. Freixas and J. C. Rochet (1997) Microeconomics of Banking, MIT
Press, Cambridge, MA
[5] T. F. Hellmann, K. C. Murdock and J. E. Stiglitz, (2000) Liberalization,
Moral Hazard in Banking, and Prudential Regulation: Are Capital
Requirements Enough?, American Economic Review 90:1, 147-165
[6] D. Besanko and A. V. Thakor (1993) Relationship Banking, Deposit
Insurance and Bank Portfolio, in: C. Mayer and X. Vives (eds.), Capital
Markets and Financial Intermediation. Cambridge University Press,
Cambridge, pp. 292-318
[7] C. Matutes and X. Vives (2000) Imperfect Competition, Risk Taking,
and Regulation in Banking, European Economic Review 44, pp.1-34
[8] J. H. Boyd and D. E. Runkle (1993) Size and Performance of Banking
Firms: Testing the Predictions of Theory, Journal of Monetary
Economics 31, pp. 47-67
[9] F. S. Mishkin (1999) Financial Consolidation: Dangers and
Opportunities, Journal of Banking and Finance 23, pp. 675-691
[10] G. Gilles, (2003) The Battle of the Single European Market:
Achievements in Economic Thought, 1985-2000, Kegan Paul, London,
pp.112
[11] J. A. Bikker, (2004) Competition and Efficiency in a Unified European
Banking Market, EE Publishing, pp.49 - 58
[12] W. J. Baumol, and A. S. Blinder, (2007) Microeconomics: Principles
and Policy, Thomson, Mason, pp.277
[13] R. S. Schlossberg (2008) Mergers and acquisitions: understanding the
antitrust issues, American Bar Association, pp.689
[14] A. Griffiths and S. Wall, Intermediate Microeconomics, theory and
applications, Longman, 1996., pp. 325
[15] American Bar Association (2005) Market power handbook: competition
law and economic foundations, ABA Publishing, Chicago, pp.81
[16] W. A. McEachern, (2009) Economics: A Contemporary Introduction,
Southwest Cengage Learning, Mason
[17] European Union: The History of the European Union,
http://europa.eu/about-eu/eu-history/index_en.htm
[18] European Central Bank (2010) EU Banking Structures, ECB, Frankfurt
am Main, pp.36
[19] European Central Bank (2007) EU Banking Structures, ECB, Frankfurt
am Main, pp.53
[20] K. H├╝schelrath, (2008) Competition Policy Analysis: An Integrated
Approach, Physica-Verlag, Heidelberg, pp.183
[21] G. Stone (2007) Core Economics, Worth Publishers, Pennsylvania
[22] P. K. Watson and S. S. Teelucksingh (2002) A practical introduction to
econometric methods: classical and modern, University of the West
Indies Press, Kingston,
[23] J. H. Stock and M. W. Watson (2006.) Introduction to Econometrics,
Addison Wesley, pp.271
[24] J. A. Hausman (1978) Specification Tests in Econometrics,
Econometrica, vol. 46/6, pp.1251-1271
@article{"International Journal of Business, Human and Social Sciences:55460", author = "Ivan Pavic and Fran Galetic and Tomislava Pavic Kramaric", title = "Level of Concentration in Banking Markets and Length of EU Membership", abstract = "The purpose of this article is to analyze the
degree of concentration in the banking market in EU member
states as well as to determine the impact of the length of EU
membership on the degree of concentration. In that sense
several analysis were conducted, specifically, panel analysis,
calculation of correlation coefficient and regression analysis of
the impact of the length of EU membership on the degree of
concentration. Panel analysis was conducted to determine
whether there is a similar trend of concentration in three
groups of countries - countries with a low, moderate and high
level of concentration. The conducted panel analysis showed
that in EU countries with a moderate level of concentration,
the level of concentration decreases. The calculation of
correlation showed that, to some extent, with other influential
factors, the length of EU membership negatively affects the
market concentration of the banking market. Using the
regression analysis for investigation of the influence of the
length of EU membership on the level of concentration in the
banking sector in a particular country, the results reveal that
there is a negative effect of the length in EU membership on
market concentration, although it is not significantly influential
variable.", keywords = "Banking sector, concentration, EU", volume = "6", number = "1", pages = "71-6", }