The Evaluation of Market Competition in Iranian Banking System (Panzar and Rosse Approach)

Subject Areas : business management

Hossein Sharifinia ¹ , Hooshang Momeni Vesalian ² , Alireza Daghighiasli ³ , Marjan Damankeshideh ⁴ , Majid Feshari ⁵

1 - department of Economics, Faculty of Accounting and Economics,, Central Tehran Branch, Islamic Azad University, tehran, iran
2 - Department of Economics , Faculty of Accounting and Economics, Central Tehran Branch, Islamic Azad University, tehran, iran
3 - Department of Economics, Faculty of Accounting and Economics, Central Tehran Branch, Islamic Azad University, tehran, iran.
4 - Department of Economics , Faculty of Accounting and Economics, Central Tehran Branch, Islamic Azad University, tehran, iran
5 - Department of General Economics, Faculty of Economics, Kharazmi University, Tehran, Iran.

Received: 2019-10-27 Accepted : 2020-01-04 Published : 2020-03-20

Keywords: Banking system, Market Competition, Private and Government Owened Bank's. Panzar and Rosse Approach,

Abstract :

  The evaluation of market competition is one of the main issues in the industrial and monetary economics. So, the main objective of this article is to estimate the banking market structure in private and governmental banks during the period of 2006-2017. For achieving this purpose, at the first step we computed the banking sector's market competition by Panzar-Rosse approach. In the second step we evaluated the impact of market competition on total revenue of banks by using dynamic panel data regression with generalized method of moment approach. The results of model estimation indicated that the market competition in thesae banks has been estimated over the 0.59. Henve, the market structure is similar to incomplete competition. Moreover, the lag of total revenue and equity return have positive and wage rate has negative impact on total revenue of banks during the period of study. Keywords: Market Competition, Banking System, Private and Government Owened Bank's. Panzar and Rosse Approach