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Consolidation, market power and cost economies in the banking industry: empirical evidence from Argentina
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Delfino, María Eugenia (2002) Consolidation, market power and cost economies in the banking industry: empirical evidence from Argentina. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.633).
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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
Abstract
The Argentine banking industry has experienced increasing consolidation during the last decade. On the one hand, it can be argued that this has resulted from cost economies, perhaps associated with technical change. But on the other, it can also be argued that increased concentration in this industry may allow the exploitation of market power in the input (deposits) and output (loans) markets. These issues are addressed in this study using bank-level data for Argentine retail banks over the period 1993-2000 to estimate a cost-function based model incorporating deposits- and loans-market pricing behaviour. The results provide evidence of market power exploitation in both the markets for loans and deposits but also the presence of significant cost economies. The findings further show an increase in consumers’ surplus and banks’ profits over the period possibly associated to the exploitation of cost economies and technical change which may have counteracted the effect of market power.
| Item Type: | Working or Discussion Paper (Working Paper) | ||||
|---|---|---|---|---|---|
| Subjects: | H Social Sciences > HG Finance | ||||
| Divisions: | Faculty of Social Sciences > Economics | ||||
| Library of Congress Subject Headings (LCSH): | Banks and banking -- Argentina, Bank mergers -- Argentina, Capital market -- Argentina, Welfare economics, Cost accounting -- Argentina | ||||
| Series Name: | Warwick economic research papers | ||||
| Publisher: | University of Warwick, Department of Economics | ||||
| Place of Publication: | Coventry | ||||
| Official Date: | March 2002 | ||||
| Dates: |
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| Number: | No.633 | ||||
| Number of Pages: | 35 | ||||
| Status: | Not Peer Reviewed | ||||
| Access rights to Published version: | Open Access (Creative Commons) |
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