Open AccessEfficiency and Competition in Banking Industry: Case for ASEAN-5 Countries
Author(s) -
Ulik Hertina Wuni Astuti,
Putu Mahardika Adi Saputra
Publication year - 2019
Publication title -
scientific annals of economics and business
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.204
H-Index - 6
eISSN - 2501-3165
pISSN - 2501-1960
DOI - 10.47743/saeb-2019-0011
Subject(s) - monopolistic competition , competition (biology) , lerner index , financial crisis , economics , index (typography) , order (exchange) , banking industry , market structure , international economics , business , international trade , industrial organization , financial system , market power , market economy , macroeconomics , finance , monopoly , ecology , world wide web , computer science , biology
This paper analyzes the level of the efficiency and competition (market structure) of ASEAN-5 banking industry from 2005 until 2016. Two methods were employed, i.e. Stochastic Frontier Analysis and Adjusted Lerner Index. The former is utilized to measure the bank efficiency in ASEAN-5 countries and the latter is applied to measure the bank competition (market structure) in ASEAN-5 banking industry. In order to connect the efficiency and competition level of ASEAN-5 banking industry, this study also utilizes quadrant analysis based on three different periods, namely the period before the global crisis (2005-2008), the period after global crisis (2009-2015), and the period after the establishment of ASEAN Economic Community –AEC- (2016). The results reveal that on average, the efficiency and the competition level of banks in ASEAN-5 countries are found to be relatively high. The competition in ASEAN-5 banking industry could be classified as monopolistic where each bank competes by diversifying their products or segments.