Structure and Market Power in the South African Banking Sector
Nomasomi Ngonyama & Munacinga Simatele
What the paper says
Policy makers determine the nature of competition in industries using measures such as the Hirschman-Herfindahl index and concentration ratios. The literature however suggest that more direct measures in the New Empirical Industrial Organisation approach are more direct and better measures of competition. The findings of these measures however sometimes conflict and do not align with the observed behaviour of banks. The paper employs three different measure of competition including the Lerner Index, the Panzar-Rosse H-statistics and Boone indicator to interrogate which measure gives results that are more indicative of market behaviour. The results indicate that the Lerner and Boone indicator measures maybe more accurate as a measure of bank behaviour. Further, we suggest that the main reason for contradictory results and may be more a data than a methods problem.
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.00 × 0.4 = 0.00 |
| M · momentum | 0.20 × 0.15 = 0.03 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.