Decomposition of Concentration and Diversification Measures of Activity: The Case of the Commercial Banks Sector in Poland

Financial Markets and Institutions, pp. 36-52, May 2007

17 Pages Posted: 18 Oct 2007

See all articles by Krzysztof Jackowicz

Krzysztof Jackowicz

Kozminski University

Oskar Kowalewski

IESEG School of Management; LEM - CNRS 9221

Abstract

In our paper we have tried to present the literature describing methods for decomposing measures of concentration and diversification, as well as tried to explain reasons for the changes in the level of concentration and diversification in the sector of Polish commercial banks in 1996-2005. When the scale of banks' activities is measured on the basis of the values of balance sheet assets, it turns out that in most cases the changes in the level of concentration or diversification are driven by the stronger impact of the increased uniformity of share distribution, rather than the impact of the decreasing number of institutions in the sector. After replacing assets with the value of income from main banking activities, the yearly changes are better explained in most cases by the scenario assuming a single directional impact of the decrease in the uniformity of share distribution and the decrease in the number of commercial banks. In general, we conclude that the overall picture of the level of concentration, its yearly and ten-year changes, as well as the reasons for these changes, depends strongly on the decision how to measure the scale of commercial banks' activities.

Note: Downloadable document is in Polish.

Keywords: concentration, decomposition, banking sector

JEL Classification: G21, L11

Suggested Citation

Jackowicz, Krzysztof and Kowalewski, Oskar, Decomposition of Concentration and Diversification Measures of Activity: The Case of the Commercial Banks Sector in Poland. Financial Markets and Institutions, pp. 36-52, May 2007, Available at SSRN: https://ssrn.com/abstract=1022517

Krzysztof Jackowicz (Contact Author)

Kozminski University ( email )

ul. JagielloDska 57/59
Warsaw, 03-303
Poland

Oskar Kowalewski

IESEG School of Management ( email )

1 Parvis de La Défense
Socle de la Grande Arche
Paris La Défense cedex, 92044
France

HOME PAGE: http://www.ieseg.fr/en/faculty-and-research/professor/?id=1740

LEM - CNRS 9221 ( email )

Lille
France

HOME PAGE: http://lem.cnrs.fr/

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