Measuring Competition in Iranian Banking Sector: The Hall-Roeger Approach

Document Type : Original Article


1 Department of Economics, Faculty of Management and Economics, University of Sistan and Baluchestn

2 M.A in Economics, Faculty of Management and Economics, University of Sistan and Baluchestn


This paper employs the Hall-Roeger model to determine the level of competition in Iranian banking industry during 2007 -2011. In so doing, the Lerner Index calculated for 18 Private and Public banks. We find that during this period the Lerner index for 15 banks has been fluctuated from 0.1 to 0.90 and for three remain banks is negative. The findings suggest that more than 0.80 of operating in the country, there is significant gap between their price and marginal costs lead them to gain market power. Also in this study we have estimate the Herfindal-Hirschman Index and the k bank ratio over the years of 2003-2011 and show that over this period concentration degree has reduced.


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