Book Description
In this project, I investigate the determinants and effects of bank concentratio n in emerging market economies. I start by an overview of the main characteristi cs of these economies with emphasis on the recent developments in their financia l and banking systems. Then, I review the theory of concentration and the common indicators used to measure it. Afterwards, I empirically find the determinants of banking sector concentration based on a sample of bank-specific and macroecon omic variables in sixty emerging countries over the period of 1996-2004. The res ults are used to present two new indicators of bank concentration that account f or institutional, technical and market-related attributes. Finally, I summarize the relationship between market structure and market performance given by the tr aditional Structure-Conduct-Performance (SCP) paradigm, as well as the empirical studies that tested its predictions. This is followed by a study of the effect of concentration on consumer welfare. I conduct a correlation analysis between t he two predicted concentration indicators from one side and indicators of the ac cess to banking services and individual income from the other side.