Competition in the Clearing and Settlement Industry

56 Pages Posted: 1 Oct 2015 Last revised: 21 Jan 2016

See all articles by Shaofang Li

Shaofang Li

Southeast University - School of Economics and Management

Matej Marinc

University of Ljubljana - Faculty of Economics

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Date Written: September 30, 2015

Abstract

This article empirically analyzes the competitive landscape within the clearing and settlement industry. Using panel data for forty-six clearing and settlement institutions from twenty-three countries, we confirm that competition between clearing and settlement institutions is limited. We show that competition increases with institutional size, with technological development, and after horizontal mergers, but not after vertical mergers. In addition, we find that competition in clearing and settlement is higher in the US than in Europe and was higher during the global financial crisis compared to normal times.

Keywords: Clearing and Settlement Services; Competitive Condition; Panzar-Rosse Model; Global Financial Crisis

JEL Classification: G20, G29, G15, D40

Suggested Citation

Li, Shaofang and Marinc, Matej, Competition in the Clearing and Settlement Industry (September 30, 2015). Journal of International Financial Markets, Institutions and Money, Forthcoming, doi:10.1016/j.intfin.2015.09.004, Available at SSRN: https://ssrn.com/abstract=2667462

Shaofang Li

Southeast University - School of Economics and Management ( email )

Sipailou 2#
Nanjing, Jiangsu Province 210096
China

Matej Marinc (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia

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