Lang, Günter

Wettbewerbsverhalten deutscher Banken: Eine Panelanalyse auf Basis der Rosse-Panzar Statistik

Jahrbuch für Wirtschaftswissenschaften / Review of Economics, 48 (1): 38-21, (1997).

Copy reference link   DOI: 10.2307/20714861

Abstract: This article applies a modern empirical test of conduct to assess competitive conditions in the German banking sector. The elasticity of total revenues with respect to changes in input prices is calculated, using the intermediation approach as model of the banking firm. The functional form of the revenue equation is specified as a Translog function. The empirical basis consists of a panel of 1432 German universal banks with an observation period of at least four years for each of them. To account for potential consequences of the distinct regulatory environment and average bank size, the estimations are run separately for the three subgroups „cooperative banks”, „savings banks” and „credit banks”. The empirical results are consistent with the behavior of monopolistic competition, rejecting significantly the hypotheses of both monopoly and perfect competition. Differences between the subgroups turned out to be small, rejecting a causality from market share on market behavior.

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