Concentration Measuring Techniques in Banking Sector-Lorenz Curve and Gini Coefficient
Main Article Content
Abstract
The paper presents the indicators of market concentration in the banking sector with a focus on the Lorenz curve the Gini coefficient. The authors present the results of the empirical research of concentration levels in the banking sector in selected countries in the CEE region (Serbia, Croatia, Montenegro, Bosnia and Herzegovina, Macedonia, Bulgaria, Romania and Albania) in the period 2007-2012. The level of market concentration can be exploited and operationalized by using different concentration indicators. The contribution of this research is reflected in the comparative empirical analysis of the results of our previous research that was focused on quantification of the most frequently used indicators of concentration (Concentration ratio 4 and Herfindal-Hirshman index), and the results obtained using the Lorenz curve and the Gini coefficient.
The paper analyzes the level as well as variability of these indicators and tests the degree of their correlation. Individually observed, concentration indicators have relatively low capacity to present the real nature of competition in the banking sector in the analyzed countries as well as to provide a good estimate of possible future trends. The results of our analysis indicate that, for the purpose of a more precise and better understanding of the relevant issues of market concentration in the financial sector, several indicators of concentration need to be analyzed simultaneously. Additionally, improvement of methodology should provide a more reliable basis for a precise definition of adequate policies and legislation in this area.
Article Details
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Once the manuscript is accepted for publication, authors shall transfer the copyright to the publisher. If the submitted manuscript is not accepted for printing by the journal, the authors shall retain all their rights. The following rights on the manuscript are transferred to the publisher, including any supplementary materials and any parts, extracts or elements of the manuscript:
- the right to reproduce and distribute the manuscript in printed form, including print-on-demand;
- the right to print prepublications, reprints and special editions of the manuscript;
- the right to translate the manuscript into other languages;
- the right to reproduce the manuscript using photomechanical or similar means including, but not limited to photocopy, and the right to distribute these copies;
- the right to reproduce and distribute the manuscript electronically or optically using and all data carriers or storage media, and especially in machine readable/digitalized form on data carriers such as hard drive, CD-ROM, DVD, Blu-ray Disc (BD), Mini Disc, data tapes, and the right to reproduce and distribute the article via these data carriers;
- the right to store the manuscript in databases, including online databases, as well as the right to transmit the manuscript in all technical systems and modes;
- the right to make the manuscript available to the public or to closed user groups on individual demand, for use on monitors or other readers (including e-books), and in printable form for the user, either via the Internet, online service, or via internal or external networks.
References
Bikker, Jacob Antoon and Katharina Haaf. (2000). ‘’Measures of competition and concentration in the banking industry: a review of a literature’’ De Nederlandsche Bank
Deidda, Lucca and Bassam Fattouh. (2005). ‘’Concentration in the Banking Industry and Economic Growth’’ Macroeconomic Dynamics, 9(2): 198-219.
Dimić, Maja S. (2015). ‘’Concentration level in banking and insurance sector in CEE countries’’, PhD diss. Singidunum University.
Dimić, Maja S. (2018). Banking and insurance sector in CEE region in terms of crisis- monograph, Faculty for Business Studies and Law, Belgrade.
Dimić, Maja, Svetislav Paunović and Branko Tešanović. (2019). ‘’Lorenz curve and Gini coefficient as a measuring concentration techniques in insurance sector in CEE countries in terms of crisis’’ in Further directions of economic transformation in the function of development, ed. Branko Tešanović, 267-289. Belgrade: Faculty for Business Studies and Law.
Dumićić, Ksenija, Anita Pavković and Josipa Akalović-Antić. (2012). ’’Measuring the concentration of banking in the Republic of Croatia’’ Proceedings of the faculty of Economics and Business, 10(2): 117-136.
Hall, Marshall and Nicolaus Tideman. (1967). ‘’Measures of concentration’’ Journal of the American Statistical Association, 62(317): 162-168.
Hawkins, John and Dubravko Mihaljek. (2001). The banking industry in the emerging market economies: competition, consolidation and systemic stability, BIS Paper No.4.
Kostić, Milan. (2008). ‘’Measurement of industrial supply concentration’’ Economic Horizons, 10(1):89-108.
Kostić, Milan. (2009). ‘’Level concentration in insurance sector in Serbia’’ Industrija Journal, 37(2):59-77.
Lipczynski, John and John Wilson. (2001). Industrial organisation- an analysis for competitive markets, Harlow, UK: Prentice Hall.
Ljubaj, Igor. (2005). Concentration indexes in banking sector in Croatia, Croatian National Bank
Marinković, Srđan. 2007. ‘’The industrial concentration in Serbian banking: The degree and its dynamics’’ Teme, 31(2):283-293.
Raičević, Milica and Dijana Medenica-Mitrović. (2018). “Social Responsibility of Banks in the Function of Comparative Advantage on the Market” Economic Analysis, 51(1-2):92-102.
Tipurić, Darko, Marko Kolaković and Ksenija Dumičić. (2002). ‘’Croatian banking industry concentration scanges in 1993-2002’’ Proceedings of the faculty of Economics and Business, 1(1):1-22.
Šubić, Roman. (2009). ''Role of foreign banks in integration of banking industry’’ Economic Journal, 22(2):296-313.