Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257093 
Year of Publication: 
2020
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 8 [Issue:] 2 [Article No.:] 44 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-20
Publisher: 
MDPI, Basel
Abstract: 
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.
Subjects: 
banking
competition
Lerner Index
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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