Competition and Concentration in Banking Sector: Evidence from Bangladesh

Abstract Considering the significance of competition and concentration in pricing, efficiency, productivity and stability of banking sector, this paper has explored the competitive behavior and concentration level in the banking sector of Bangladesh considering 20 commercial banks for the period of 2004-2013. The level of competition has been tested using the Panzar and Rosse model while the level of concentration has been analyzed using concentration indices and the Herfindahl-Hirschman indices in terms of assets, loans, and deposits. The findings point to a non-concentrated market with monopolistic competition in the banking sector of Bangladesh. This paper contributes to the understanding of competition and concentration level in the banking sector of a developing country like Bangladesh along with important policy implications for economists, business strategists, bank management, regulators and other stakeholders.https://thekeep.eiu.edu/lib_awards_2018_docs/1003/thumbnail.jp