New evidence on assessing the level of competition in the European Union banking sector: A panel data approach

Apergis, Nicholas, Fafaliou, Irene and Polemis, Michael (2016) New evidence on assessing the level of competition in the European Union banking sector: A panel data approach. International Business Review, 25 (1). pp. 395-407. ISSN 0969-5931

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Official URL: http://dx.doi.org/10.1016/j.ibusrev.2015.07.003

Abstract

The goal of this paper is to empirically assess the level of banking competition in the European Union (EU) across three economic blocks (i.e. EU-27, EMU-17 and the remaining EU countries). Furthermore, the paper assesses the impact of the on-going financial crisis (2008–2011) on the competition pattern of the banking sector in the European Monetary Union (EMU) as a whole, where little attention has been paid by the relevant literature. The analysis employs the Panzar and Rosse ((1987). Journal of Industrial Economics, 35, 443) methodology and draws upon a panel dataset of EU banks, spanning the period 1996–2011. The empirical findings are robust, providing updated evidence in favour of a monopolistic competition pattern across all EU economic blocks examined. The level of competition in the EMU countries triggered by bank consolidations seems to have undergone a small, albeit a significant decline, after the adoption of the euro currency and the on-going financial crisis.

Item Type: Article
Uncontrolled Keywords: Banking; Monopolistic competition; Panel data; Panzar-Rosse index; Financial crisis
Subjects: N100 Business studies
N300 Finance
Department: Faculties > Health and Life Sciences > School of Life Sciences > Psychology
Depositing User: Becky Skoyles
Date Deposited: 28 Jan 2016 15:01
Last Modified: 17 May 2017 14:56
URI: http://nrl.northumbria.ac.uk/id/eprint/25750

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