Evolution and Current Status of the Competitive Environment in the Serbian Banking Sector: Concentration Indices Analysis

Igor Janev (ed.) Serbia: Current Political, Economic and Social Issues and Challenges, Nova Science Publishers, Inc., New York, 2019, pp. 23–42

17 Pages Posted: 24 Feb 2020

See all articles by Rajko Bukvic

Rajko Bukvic

Geographical Institute “Jovan Cvijić” SASA

Date Written: 2019

Abstract

This paper analyzes the degree of concentration and competition in the Serbian banking sector during the 2010-2017 period and in its current state, by considering the financial statements of banks for the years 2016 and 2017. For this purpose, both traditional concentration indicators (concentration ratio CRn and the Herfindahl-Hirschman index), and the relatively rarely used Linda indices have been used. The degree of concentration has been calculated based on five variables: total assets, deposits, capital, operating income of banks, and loans. The degree to which these indicators are compliant with the basic antitrust regulations has been illustrated. It has been demonstrated that in the current case of a relatively large number of banks operating in Serbia, the existing degree of concentration is relatively low. This provides suitable conditions for the development of healthy competition among them. However, the approximation of the indices to moderate concentration within the period analyzed warns of the appearance of oligopoly.

Keywords: concentration, competition, banking sector, Serbia, Linda indices, Herfindahl-Hirschman index, concentration ratio, antitrust policy

JEL Classification: C38, G21, L10

Suggested Citation

Bukvic, Rajko, Evolution and Current Status of the Competitive Environment in the Serbian Banking Sector: Concentration Indices Analysis (2019). Igor Janev (ed.) Serbia: Current Political, Economic and Social Issues and Challenges, Nova Science Publishers, Inc., New York, 2019, pp. 23–42, Available at SSRN: https://ssrn.com/abstract=3527044

Rajko Bukvic (Contact Author)

Geographical Institute “Jovan Cvijić” SASA ( email )

Djure Jakšića 9 11000 Belgrade
Belgrade, 11000
Serbia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
10
Abstract Views
98
PlumX Metrics