International Journal of Banking, Risk and Insurance

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Theoretical Framework of Competition as Applied to Banking


Affiliations
1 Department of Commerce, Delhi School of Economics, University of Delhi, New Delhi, India
2 College of Vocational Studies, Delhi University, New Delhi, India
     

   Subscribe/Renew Journal


This paper lays out a fundamental approach that revises our understanding of the theoretical framework of competition. First, it critically examines classical and neo-classical approaches to competition. Second, through eight elements the new approach lays out our new understanding of the framework of competition as applied to banking. Role of basic conditions in S-C-P, dynamic S-C-P, modified S-C-P as adapted to banking, entry, concentration and competition, goals and strategic groups in banking, importance of banking theory, dynamics of banking markets; and the new concept of entry facilitator; these are all the eight new dimensions that adapt competition theory to banks.

Keywords

Competition, Structure-Conduct-Performance (S-C-P), Entry Facilitator, Basic Conditions, Strategic Groups
Subscription Login to verify subscription
User
Notifications
Font Size


  • Bains, J. S. (1959). Industrial Organization: A Treatise (2nded.). John Wiley.

  • Bodenhorn, H. (1990). Entry, Rivalry and Free Banking. Review of Economics and Statistics, 72(4), 682-686.

  • Bolt, W. & Tieman, A. F. (2001). Banking Competition- Risk and Regulation. DNB Staff Working Paper. Amsterdam.

  • Capie, F. & Billings, M. (2004). Evidence on competition in English commercial banking 1920-70. Financial History Review, 11(1), 69-103.

  • Chamberlin, E. H. (1933). A Theory of Monopolistic Competition. Cambridge, Mass: Harvard University Press.

  • Chandler, A. D. Jr. (1962). Strategy and Structure: Chapters in the History of the American Industrial Enterprise. Cambridge, MA: MIT Press.

  • Davies, S. & Lyons, B. (1991). Economics of Industrial Organisation. New York: Longman.

  • Deb, A. T. (2004). Market Structure and Entry: A Study of the Determinants of Market Concentration in Private Domestic Banking Industry in India. Paper Presented in 6th annual conference on money and finance. Mumbai: Indira Gandhi Institute for Development Research.

  • Demsetz, H. (1995). The Economics of Business Firms: Some Critical Commentaries. New York: Cambridge University Press.

  • Denizer, C. (1997). The Effect of Financial Liberalisation and New Bank Entry on Market Structure and Competition in Turkey, Research Policy Working Paper, WPS no 1839, World Bank, Washington DC.

  • Gerosky, P. A. (1989). Entry, innovation and productivity growth. Review of Economics and Statistics, 71(4), 572-578.

  • Hayek, F.A. (1948). Individualism and Economic Order. Chicago: University of Chicago Press.

  • Mason, E. S. (1939). Price and production policies of large-scale enterprise. American Economic Review, 29(1), 61-74.

  • Muller, D. C. (1986). Profits in the Long Run. Cambrige: Cambridge University Press.

  • Murugkar, M., Ramaswami, B. & Shelar, M. (2007). Competition and monopoly in Indian cotton seed market. Economic & Political Weekly, 52(37), 3781-3789.

  • Molnar-Marton, J. & Nagy-Csilla, H. (2007). A Structural Empirical Analysis of Retail Banking Competition: The Case of Hungary. MNB Working Paper 1.

  • McNulty, P. J. (1968). Economic theory and the meaning of competition. Quarterly Journal of Economics, 82(4), 639-656.

  • Neuberger, D. (1998). Structure, Conduct and Performance in Banking Markets. Working Paper, University of Rostock, Faculty of Economics and Social Sciences.

  • Newmann, H. H. (1978). Strategic groups and the structure- performance relationship. Review of Economics and Statistics, 60(1), 417-27.

  • Northcott, C. A. (2004). Competition in Banking: A Review of the Literature. Bank of Canada, Working Paper 24, Ottawa.

  • Richardson, G. B. (1975). Adam Smith on Competition and Increasing Returns. In A. Skinner and T. Wilson (Ed.), Essays in Smith (pp. 350-360). Clarendon Press: Oxford.

  • Saving, T. (1970). Concentration ratio and degree of monopoly, International Economic Review, 11(1), 139-146.

  • Schumpeter, J. (1934). The Theory of Economic Development. Cambridge, Mass: Harvard University Press.

  • Smith, A. (1976). The Wealth of Nations. Oxford: Clarendon, Schumpeter.

  • Shaffer, S. (1993). A test of competition in Canadian banking. Journal of Money Credit and Banking, February, 25(1), 49-61.

  • Stigler, G. J. (1961). The economics of information. Journal of Political Economy, 69(3), 213-25.

  • Toolsema, L. A. (2003). On Competition and Banking. Thesis of Rijks Universitet, Groningen.

  • Young, A. (1928). Increasing returns and economic progress. Economic Journal, 38, 527-42.

  • Uchida, H. & Tsutsui, Y. (2005). Has competition in the Japanese banking sector improved? Journal of Banking and Finance, 29(2), 419-439.

  • Vickers, J. (1995). Concepts of competition. Oxford Economic Papers, 47(1), 1-23.


Abstract Views: 428

PDF Views: 0




  • Theoretical Framework of Competition as Applied to Banking

Abstract Views: 428  |  PDF Views: 0

Authors

K. V. Bhanu Murthy
Department of Commerce, Delhi School of Economics, University of Delhi, New Delhi, India
Ashis Taru Deb
College of Vocational Studies, Delhi University, New Delhi, India

Abstract


This paper lays out a fundamental approach that revises our understanding of the theoretical framework of competition. First, it critically examines classical and neo-classical approaches to competition. Second, through eight elements the new approach lays out our new understanding of the framework of competition as applied to banking. Role of basic conditions in S-C-P, dynamic S-C-P, modified S-C-P as adapted to banking, entry, concentration and competition, goals and strategic groups in banking, importance of banking theory, dynamics of banking markets; and the new concept of entry facilitator; these are all the eight new dimensions that adapt competition theory to banks.

Keywords


Competition, Structure-Conduct-Performance (S-C-P), Entry Facilitator, Basic Conditions, Strategic Groups

References