Next Article in Journal
The Role of the Academic and Political Empowerment of Women in Economic, Social and Managerial Empowerment: The Case of Saudi Arabia
Next Article in Special Issue
The Impacts of China–Africa Economic Relation on Factor Productivity of African Countries
Previous Article in Journal
Declining Protection for Vietnamese Agriculture under Trade Liberalization: Evidence from an Input–Output Analysis
Previous Article in Special Issue
Determining the Financial Inclusion Output of Banking Sector of Pakistan—Supply-Side Analysis
Open AccessArticle

Empirical Measurement of Competition in the Thai Banking Industry

Department of Economics, Kasetsart University, 50 Phahonyothin Rd, Chatuchak, Bangkok 10900, Thailand
*
Author to whom correspondence should be addressed.
Economies 2020, 8(2), 44; https://doi.org/10.3390/economies8020044
Received: 22 February 2020 / Revised: 21 May 2020 / Accepted: 25 May 2020 / Published: 2 June 2020
(This article belongs to the Special Issue The Theory Applications of Finance and Macroeconomics)
The degree of competition in the banking industry can be observed and measured by two approaches, structural and nonstructural. Based on these two approaches, there are various indicators, which are different factors and methods. This paper aims to provide calculations, determine a good indicator, and assess the competitive environment of the Thai banking industry. Specifically, there are four indicators—concentration ratio, Herfindahl–Hirschman Index, Lerner Index, and Panzar–Rosse H statistic—which are widely used to examine the efficiency and effectiveness of policies in the banking industry. The findings indicate that the Lerner Index, calculated by stochastic frontier analysis, is the most reliable indicator of the banking competition environment in Thailand. It has a range of 0.36 to 0.60 and an average value of 0.40. Furthermore, during the period of study, the degree of Thai banking competition had a tendency to increase over time, which reflects an increase in allocative efficiency of resources in the banking industry. This is in accordance with the Financial Sector Master Plan of the country. However, this result probably leads to instability of the financial system. Therefore, policy-makers should carefully regulate competition policy by considering the systematic risk of the banking system at the same time. View Full-Text
Keywords: banking; competition; Lerner Index banking; competition; Lerner Index
Show Figures

Figure 1

MDPI and ACS Style

Prayoonrattana, J.; Laosuthi, T.; Chaivichayachat, B. Empirical Measurement of Competition in the Thai Banking Industry. Economies 2020, 8, 44.

AMA Style

Prayoonrattana J, Laosuthi T, Chaivichayachat B. Empirical Measurement of Competition in the Thai Banking Industry. Economies. 2020; 8(2):44.

Chicago/Turabian Style

Prayoonrattana, Jirawan; Laosuthi, Thanarak; Chaivichayachat, Bundit. 2020. "Empirical Measurement of Competition in the Thai Banking Industry" Economies 8, no. 2: 44.

Find Other Styles
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Search more from Scilit
 
Search
Back to TopTop