Banking concentration and the price-concentration relationship: the case of Brazil. (9th November 2009)

• Record Type: Journal Article
• Authors: Tabak, Benjamin Miranda; Guerra, Solange Maria; De Souza Penaloza, Rodrigo Andres
• Is Part Of: International journal of accounting and finance. Volume 1:Number 4(2009)
• Page Start: 415
• Page End: 435
• Publication Date: 2009-11-09
• Subjects: banking concentration -- Hirschman-Herfindahl Index -- HHI -- duality theory -- Brazil -- banking structure -- price -- competition -- banks; Accounting -- Periodicals; Finance -- Periodicals; 332.05
• Languages: English
• ISSNs: 1752-8224

Abstract

In this paper, we present a new measure of concentration that employs duality theory and a study on the evolution of banking concentration in the Brazilian banking system. We present evidence suggesting that this new measure of concentration is more informative than the usual Hirschman-Herfindahl Index (HHI), which is commonly employed in concentration studies. Finally, we study the relation between the banking structure (level of concentration) and price using a panel data model, macroeconomic and risk variables being controlled. There is no evidence that banking concentration leads to uncompetitive practices.