Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis
The banking industry has become a substantial part of the economy. This paper traces the change in market structure and assess the level of competition among the top 10 banks of Indonesia for the period 2005-2014. Then also distinguishing between before and after the Global Financial Crisis. Utilizi...
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| Format: | Article |
| Language: | English |
| Published: |
Departemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis Universitas Airlangga
2020-12-01
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| Series: | JDE (Journal of Developing Economies) |
| Subjects: | |
| Online Access: | https://e-journal.unair.ac.id/JDE/article/view/19660 |
| _version_ | 1811180245473034240 |
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| author | Khoirunurrofik Khoirunurrofik Mohammad Alvin Prabowosunu Mohammad Ikhsan Fansuri |
| author_facet | Khoirunurrofik Khoirunurrofik Mohammad Alvin Prabowosunu Mohammad Ikhsan Fansuri |
| author_sort | Khoirunurrofik Khoirunurrofik |
| collection | DOAJ |
| description | The banking industry has become a substantial part of the economy. This paper traces the change in market structure and assess the level of competition among the top 10 banks of Indonesia for the period 2005-2014. Then also distinguishing between before and after the Global Financial Crisis. Utilizing the Panzar-Rosse method and panel data, we discovered that the results show an increase in the H-value from 2005-2009 to 2010-2014 and a movement towards an almost perfectly competitive environment. Interest rates drove the short response of post-crisis on the competition. Therefore governmental supervision is required to prevent liquidity issues due to the imposition of high-interest rates.
Keywords: Banking, Competition, Global Financial Crisis, Panzar-Rosse Model
JEL: D40, D41, G21, L11 |
| first_indexed | 2024-04-11T06:48:04Z |
| format | Article |
| id | doaj.art-893cf2df235d4f9e85bf8df0fb3c4589 |
| institution | Directory Open Access Journal |
| issn | 2541-1012 2528-2018 |
| language | English |
| last_indexed | 2024-04-11T06:48:04Z |
| publishDate | 2020-12-01 |
| publisher | Departemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis Universitas Airlangga |
| record_format | Article |
| series | JDE (Journal of Developing Economies) |
| spelling | doaj.art-893cf2df235d4f9e85bf8df0fb3c45892022-12-22T04:39:18ZengDepartemen Ilmu Ekonomi Fakultas Ekonomi dan Bisnis Universitas AirlanggaJDE (Journal of Developing Economies)2541-10122528-20182020-12-015214215310.20473/jde.v5i2.1966016070Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial CrisisKhoirunurrofik Khoirunurrofik0https://orcid.org/0000-0002-9345-0400Mohammad Alvin Prabowosunu1Mohammad Ikhsan Fansuri2Faculty of Economics and Business, University of Indonesia (FEB UI)Faculty of Economics and Business, University of Indonesia (FEB UI), London School of Economics and Political Science (LSE)BP FTZ TanjungpinangThe banking industry has become a substantial part of the economy. This paper traces the change in market structure and assess the level of competition among the top 10 banks of Indonesia for the period 2005-2014. Then also distinguishing between before and after the Global Financial Crisis. Utilizing the Panzar-Rosse method and panel data, we discovered that the results show an increase in the H-value from 2005-2009 to 2010-2014 and a movement towards an almost perfectly competitive environment. Interest rates drove the short response of post-crisis on the competition. Therefore governmental supervision is required to prevent liquidity issues due to the imposition of high-interest rates. Keywords: Banking, Competition, Global Financial Crisis, Panzar-Rosse Model JEL: D40, D41, G21, L11https://e-journal.unair.ac.id/JDE/article/view/19660bankingcompetitionglobal financial crisispanzar-rosse model |
| spellingShingle | Khoirunurrofik Khoirunurrofik Mohammad Alvin Prabowosunu Mohammad Ikhsan Fansuri Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis JDE (Journal of Developing Economies) banking competition global financial crisis panzar-rosse model |
| title | Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis |
| title_full | Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis |
| title_fullStr | Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis |
| title_full_unstemmed | Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis |
| title_short | Did The Crisis Strengthen Bank Competition in Indonesia?: Market Structure Analysis Pre and Post The 2008 Financial Crisis |
| title_sort | did the crisis strengthen bank competition in indonesia market structure analysis pre and post the 2008 financial crisis |
| topic | banking competition global financial crisis panzar-rosse model |
| url | https://e-journal.unair.ac.id/JDE/article/view/19660 |
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