Bank Competition in Emerging Asian Countries Pre and Post Global Financial Crisis

Abstract

The paper investigates the competitive structure of the banking industry in five emerging Asian countries (Bangladesh, Indonesia, India, Philippines, and Vietnam) during the period 2005-2012. The results reveal that the trends of competition follow a V-shape or inverted V-shape. Almost of countries’ values of θt reach the bottom in 2008-2009. This shows that the change in the trend of these V-shapes occurred in 2008 and 2009 when the global financial crisis happened. Therefore, the global financial crisis affected dramatically the competition of banking systems in emerging Asian countries. The findings also indicate that Cournot oligopoly was rejected for most of the period of four countries including Bangladesh, India, Indonesia, and Philippines. For Vietnam, Cournot oligopoly was not rejected over the 2007-2009 period.

Keywords: bank competition, emerging Asian countries, global financial crisis

JEL Classification: G21, L13