Delis, Manthos D and Pagoulatos, George (2009): Bank competition, institutional strength and financial reforms in Central and Eastern Europe and the EU.
Download (363kB) | Preview
Abstract Following their EU15 counterparts, the banking systems of Central and Eastern European (CEE) countries underwent extensive reform since the 1990s. In this paper we estimate the degree of bank market power during the periods of financial reform in each European country, and subsequently we analyze the political and institutional sources of bank competition distinguishing between the EU15 and CEE subgroups. A linear pattern in the relationship between bank competition and institutional strength is demonstrated for the EU15 group of countries, while for the CEEs this pattern is non-linear. Therefore, we suggest that relatively underdeveloped banking systems, in less advanced politico-institutional milieus, overall fail to benefit from reforms in their early stages. As a policy implication the results imply that a certain level of institutional maturity, combined with openness to foreign investors, is a precondition for reforms aiming at enhancing competition and efficiency of banking markets.
|Item Type:||MPRA Paper|
|Original Title:||Bank competition, institutional strength and financial reforms in Central and Eastern Europe and the EU|
|Keywords:||Bank competition; Financial reforms; Institutional development; European Union; Central and Eastern European countries|
|Subjects:||C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General
P - Economic Systems > P5 - Comparative Economic Systems > P51 - Comparative Analysis of Economic Systems
P - Economic Systems > P3 - Socialist Institutions and Their Transitions > P34 - Financial Economics
G - Financial Economics > G2 - Financial Institutions and Services > G21 - Banks ; Depository Institutions ; Micro Finance Institutions ; Mortgages
|Depositing User:||Manthos Delis|
|Date Deposited:||30. Jul 2009 00:14|
|Last Modified:||13. Feb 2013 03:14|
Amable, B., 2004. The Diversity of Modern Capitalism. Oxford: Oxford University Press.
Angelini, P., Cetorelli N., 2003. The effects of regulatory reform on competition in the banking industry. Journal of Money, Credit, and Banking 35, 663-684.
Baltagi, B., 2008. Econometric Analysis of Panel Data. Chichester: John Wiley & Sons.
Beck, T., Demirguc-Kunt., A., Levine, R., 2000. A new database on financial development and structure. World Bank Economic Review 14, 567-605.
Berger, A.N., Humphrey, D.B., 1997. Efficiency of financial institutions: International survey and directions for future research. European Journal of Operational Research 98, 175-212.
Bresnahan, T., 1982. The oligopoly solution concept is identified. Economics Letters 10, 87-92.
Bresnahan, T., 1989. Empirical studies of industries with market power. In R. Schmalensee & R. Willig (eds), Handbook of Industrial Organization. Holland: Elsevier Science Publications.
Brissimis, S.N., Delis, M.D., Papanikolaou, N.I., 2008. Exploring the nexus between banking sector reform and performance: Evidence from Central and Eastern European countries. Journal of Banking and Finance, forthcoming.
Bröker, G., 1989. Competition in Banking, Paris: OECD. Demirguc-Kunt A., Laeven L., Levine R., 2004. Regulations, market structure, institutions, and the cost of financial intermediation. Journal of Money, Credit, and Banking 36, 593-622.
Dyson, K. (ed.), 2006. Enlarging the Euro Area: External Empowerment and Domestic Transformation in East Central Europe. Oxford: Oxford University Press.
European Bank for Reconstruction and Development, 2006. Transition Report 2006. London: EBRD.
European Bank for Reconstruction and Development, 2001. Transition Report 2001. London: EBRD.
European Bank for Reconstruction and Development, 1999. Transition Report 1999. London: EBRD.
European Central Bank, 2008. Measuring Financial Integration in EU Member States. ECB Occasional Paper Series, 81, March.
Eyal G., Szelenyi I., and Townsley E., 1998. Making Capitalism without Capitalists. New York: Verso.
Feigenbaum, H., Hennig, J., and Hamnett, C., 1998. Shrinking the State: The Political Underpinnings of Privatization. Cambridge: Cambridge University Press.
Hall, P.A. and Soskice, D. (eds), 2001. Varieties of Capitalism: The Institutional Foundations of Comparative Advantage. Oxford: Oxford University Press.
Hannan, T., 1991. Bank commercial loan markets and the role of market structure: Evidence from surveys of commercial lending. Journal of Banking and Finance 15, 133-149.
Iwata, G., 1974. Measurement of conjectural variations in oligopoly. Econometrica 42, 947-966.
Javorcik, B.S., 2004. Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages. American Economic Review 94, 605-627.
Kaminsky, G.L., Schmukler, S.L., 2003. Short-run pain, long-run gain: The effects of financial liberalization. IMF Working Paper No. 03/34.
Keeley, M.C., 1990. Deposit insurance, risk, and market power in banking. American Economic Review 80, 1183-1200.
Kumbhakar, S.C., Lovell, C.A.K., 2000. Stochastic Frontier Analysis. Cambridge: Cambridge University Press.
Kumbhakar, S.C., Lozano-Vivas, A., 2005. Deregulation and productivity: The case of Spanish banks. Journal of Regulatory Economics 27, 331-351.
Lau, L., 1982. On identifying the degree of competitiveness from industry price and output data. Economics Letters 10, 93-99.
Majone, G., 1996. Regulating Europe. London: Routledge.
McMenamin, I., 2004. Varieties of capitalist democracy: What difference does East-Central Europe make? Journal of Public Policy 24, 259-274.
Pagan, A. & Ullah, A., 1999. Nonparametric econometrics. Themes in modern economics. Cambridge: Cambridge University Press.
Pagoulatos, G., 2003. Greece’s New Political Economy: State, Finance and Growth from Postwar to EMU, Houndmills: Palgrave Macmillan.
Panzar, J. & Rosse, J., 1987. Testing for "monopoly" equilibrium. Journal of Industrial Economics 35, 443-456.
Papazoglou, C., 2005. The Economies of South Eastern Europe. Performance and Challenges. Houndmills: Palgrave Macmillan.
Rosse, J. & Panzar, J., 1977. Chamberlin vs. Robinson: An empirical test for monopoly rents. Economic Discussion Papers, No. 90. Bell Laboratories.
Salas, V., Saurina, J., 2003. Deregulation, market power and risk behavior in Spanish banks. European Economic Review 47, 1061-1075.
Shaffer, S., 1993. A test of competition in Canadian banking. Journal of Money, Credit, and Banking 25, 49-61.
Shaffer, S., 2004. Comment on “What drives bank competition? Some international evidence” by Stijn Claessens and Luc Laeven. Journal of Money, Credit, and Banking 36, 585-591.
Staniszkis, J., 1991. The Dynamics of Breakthrough. Berkeley: University of California Press.
Uchida, H. & Tsutsui, Y., 2005. Has competition in the Japanese banking sector improved? Journal of Banking and Finance 29, 419-439.
Verdier, D., 2003. Moving Money: Banking and Finance in the Industrializing World. Cambridge: Cambridge University Press.
Yildirim, H.S., Philippatos, G.C., 2007. Restructuring, consolidation and competition in Latin American banking markets. Journal of Banking and Finance 31, 629-639.
Zysman, J., 1983. Governments, Markets and Growth: Financial Systems and the Politics of Industrial Change. Ithaca: Cornell University Press.
Available Versions of this Item
- Bank competition, institutional strength and financial reforms in Central and Eastern Europe and the EU. (deposited 30. Jul 2009 00:14) [Currently Displayed]