Bank competition in Russia: From aggregation to geographical segments

P. 24–32.

Anisimova A. I., Muradyan P. A., Vernikov A. V.

This empirical paper adds to competition and industrial organization literature by exploring the interplay between industry structure and competitiveness on local, rather than nation-wide, markets. We use micro-level statistical data for banks in two Russian regions (Bashkortostan and Tatarstan) to estimate Herfindahl-Hirschman index, Lerner index, and Panzar-Rosse model. We estimate Panzar-Rosse model in two ways: via the widely used price-equation that accounts for scale effects and then via a revenue-equation that disregards scale effects as suggested by Bikker, Shaffer and Spierdijk (2009). We find both regional markets to be ruled by monopolistic competition, although estimation by revenue-equation does not reject monopoly hypothesis for Tatarstan. Existence of sizeable locally-owned and operated institutions does not necessarily lead to higher competitiveness of the given regional market. Non-structural methods of estimation suggest that bank competition in Bashkortostan is stronger than in Tatarstan.

Keywords: конкуренция, банки, Татарстан, Россия, Russia, competition, banks, concentration, Bashkortostan, Tatarstan, market power, Lerner index, концентрация, Башкирия, индекс Лернера, рыночная сила

In book

XIII Международная научная конференция по проблемам развития экономики и общества. В 4 кн. Кн. 2.

Кн. 2. , М.: Издательский дом НИУ ВШЭ, 2012.