Measuring the monopoly power of Iran's banking industry with the Hall-Roger approach

Subject Areas : Financial Economics

Jafar Yousefi ¹ , Mehdi Moradi ² , Seyed Yousef Hajiasghari, ³ , Rostam Gharehdaghi ⁴

1 - PhD student in Development Economics, Middle Branch, Islamic Azad University, Middle, Iran.
2 - Assistant Professor, Department of Economics, Middle Branch, Islamic Azad University, Middle, Iran
3 - Assistant Professor, Department of Management, Middle Branch, Islamic Azad University, Middle, Iran
4 - Assistant Professor, Department of Management, Middle Branch, Islamic Azad University, Middle, Iran

Received: 2023-05-28 Published : 2025-07-02

Keywords: Banking industry, monopoly power, Lerner index, Hall-Roger,

Abstract :

Abstract In recent years, market power in various industries including the banking industry has attracted the attention of researchers, the reduction of monopoly power in the banking industry reduces the cost of financial intermediation and increases economic growth and social welfare, so in this article, the market structure of the industry Iranian banking was investigated using the Hall-Roger model in the period of 1380-1400 and the Lerner index was calculated for 33 public and private banks. The research results show that the Lerner index for 29 banks is between 0.11 and 0.93 and is negative for three other banks; Therefore, the findings confirm that in more than 88% of active banks in the country, there is a significant gap on the final price and cost. Also, in this research, Herfindahl-Hirschman empirical indices and CR4 index were also calculated and the results of calculations on both indices indicate the fact that the monopoly power in the money market has decreased in this period and the competition coefficient has increased. Keywords: banking industry, monopoly power, Lerner index, Hall-Roger