Abstract

http://ssrn.com/abstract=1869978
 


 



Market Power, Efficiency and Performance of Indonesian Banks


Fadilla Dwi Ardianty


Universitas Indonesia

Viverita .


Universitas Indonesia (UI) - Graduate School of Management Faculty of Economics and Business

2011


Abstract:     
This study aims to examine the existence of the two common hypothesis in banking industry, i.e: the Structure Conduct Performance (SCP) Hypothesis and the Efficient Structure (EFS) Hypothesis by analyzing the impact of market power and efficiency on performance of public banks in Indonesia for the period of 2003-2009. The estimation of efficiency is obtained by using two difference approaches: a parametric Stochastic Frontier Analysis (SFA) and non-parametric Data Envelopment Analysis (DEA). Findings of the study support the Structure Conduct Performance hypothesis, where market power is the most significant factor that influences banking performance. Furthermore, the results also support a quiet life hypothesis where the banks enjoy the advantages of market power in terms of foregone revenues or cost savings.

Number of Pages in PDF File: 15

Keywords: Structure Conduct Performance Hypothesis, Efficient Structure Hypothesis, Market power, Efficiency, Performance

JEL Classification: D4, G21, L11

working papers series


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Date posted: June 22, 2011 ; Last revised: February 16, 2013

Suggested Citation

Ardianty, Fadilla Dwi and ., Viverita, Market Power, Efficiency and Performance of Indonesian Banks (2011). Available at SSRN: http://ssrn.com/abstract=1869978 or http://dx.doi.org/10.2139/ssrn.1869978

Contact Information

Fadilla Dwi Ardianty
Universitas Indonesia ( email )
Depok, West Java 16424
Indonesia
Viverita . (Contact Author)
Universitas Indonesia (UI) - Graduate School of Management Faculty of Economics and Business ( email )
Depok, West Java 16424
Indonesia
+62217270164 (Phone)
+622178849155 (Fax)
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