The Price-Concentration Relationship in Banking

The commonly observed positive correlation between market concentration and profitability may be explained by non-competitive pricing behavior, as argued by the structure-performance hypothesis, or by the greater efficiency of firms with dominant market shares, as argued by the efficient structure h...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:The review of economics and statistics 1989-05, Vol.71 (2), p.291-299
Hauptverfasser: Berger, Allen N., Hannan, Timothy H.
Format: Artikel
Sprache:eng
Schlagworte:
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
Beschreibung
Zusammenfassung:The commonly observed positive correlation between market concentration and profitability may be explained by non-competitive pricing behavior, as argued by the structure-performance hypothesis, or by the greater efficiency of firms with dominant market shares, as argued by the efficient structure hypothesis. By examining the price-concentration relationship instead of the profit-concentration relationship, this paper tests the structure-performance hypothesis in a manner that excludes the efficient-structure hypothesis as an alternative explanation of the results. The results strongly support the structure-performance hypothesis and are robust with respect to model specification, measurement of concentration, and econometric technique.
ISSN:0034-6535
1530-9142
DOI:10.2307/1926975