Document Type
Article
Abstract
This study aimed to estimate the degree of market power exercised by commercial banks in the credit market in Indonesia. The model used to answer this study’s objective was the Bresnahan-Lau oligopoly model that uses structural equations to estimate the degree of market power. This model uses a very different approach than Structure-Conduct-Performance (SCP) paradigm commonly used in market power studies. Without using actual cost data and accounting profit, the Bresnahan-Lau model was able to estimate directly the degree of market power from the structural equations. The main result of this study showed that the degree of market power exercised by commercial banks in the credit market is relatively low; in other words, the degree of competition in the credit market in Indonesia is quite high.
Recommended Citation
Lubis, Andi Fahmi
(2012)
"MARKET POWER OF INDONESIAN BANKING,"
Bulletin of Monetary Economics and Banking: Vol. 14:
No.
3, Article 4.
DOI: https://doi.org/10.21098/bemp.v14i3.403
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol14/iss3/4
First Page
225
Last Page
244
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Indonesia
Affiliation
University of Indonesia
