An assessment of competition in the Argentine banking sector: empirical evidence with bank-level data

Working papers | 2010 | N 49

Abstract

The model of profit-maximizing oligopolistic banks developed by Bresnahan and Lau allows us to determine the degree of market power exercised by the average bank. The equilibrium price equation includes a mark up, which is not used in perfect competition, partially used in the case of oligopoly or monopolistic competition, and fully used in monopoly. This work investigates the degree of competition in the loan market in Argentina in the period 2002-2007. The hypothesis of perfect competition in the loan market can be rejected.

JEL classification: E43, E51, F36, G21, L1