ASSESSING COMPETITION WITH THE PANZAR-ROSSE MODEL: THE ROLE OF SCALE, COSTS, AND EQUILIBRIUM

• 成果类型: Article
• 署名作者: Bikker, Jacob A.; Shaffer, Sherrill; Spierdijk, Laura
• 署名单位: European Central Bank; De Nederlandsche Bank NV; Utrecht University; Utrecht University; University of Wyoming; Australian National University; University of Groningen
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/REST_a_00210
• 发表日期: 2012-11
• 页码: 1025-1044
• 关键词: drives bank competition; market-structure; POWER; EFFICIENCY; industry; CONDUCT; contestability; BEHAVIOR; GROWTH; tests

摘要

The Panzar-Rosse test has been widely applied to assess competitive conduct, often in specifications controlling for firm scale or using a price equation. We show that neither a price equation nor a scaled revenue function yields a valid measure for competitive conduct. Moreover, even an unscaled revenue function generally requires additional information about costs and market equilibrium to infer the degree of competition. Our theoretical findings are confirmed by an empirical analysis of competition in banking, using a sample containing more than 100,000 bank-year observations on more than 17,000 banks in 63 countries during the years 1994 to 2004.