Thursday, June 19, 2014
Matousek, Roman (Sussex University, UK), Nguyen, Thao Ngoc (Nottingham Trent University, UK) and Stewart, Chris (Kingston University London) analyze Market structure in the banking sector: Evidence from a developing economy.
ABSTRACT: This paper examines the market structure of Vietnam’s banking system from 1999 to 2009 using the non-structural (Panzar-Rosse) model. We consider a more comprehensive range of specifications, in terms of a greater number of environmental covariates and different dependent variables, than in previous applications of this model. Further, this is the first study that uses lagged input prices (to avoid endogeneity) and excludes assets (to avoid specification bias) in such a study of the Vietnamese banking system. We find that the Vietnamese banking system operates in monopolistic competition with non-state owned commercial banks behaving more competitively than state owned commercial banks.