Banking competition in the Brazilian economy

Abstract: This paper applies the Panzar-Rosse model to assess the level of competition in the Brazilian banking sector. The sample covers 62 banks in the period from July 1994 to February 2012. Special attention is paid to the presence of scale variables in the regression, the existence of seasonal components in the financial time series, and the normalization of the price of banking inputs. The inclusion of scale variables in the model and the presence of seasonality in the data tend to erroneously indicate a competitive market structure. Contrary to the literature, in the seasonally-adjusted model without scale variables, the H-statistics indicates that banks in general and specific subgroups are non-competitive in the market. While large banks have high market power, public banks have intermediary market power, compatible with the various kinds of political interference in their management decisions.

摘要：本文采用Panzar-Rosse模型（Panzar-Rosse model）对巴西银行业的竞争水平进行评估。研究样本涵盖1994年7月至2012年2月期间的62家银行。本次研究重点关注了回归分析中的规模变量、金融时间序列中的季节性成分，以及银行投入品价格的标准化处理。在模型中纳入规模变量且数据存在季节性特征时，往往会错误地得出市场结构具有竞争性的结论。与既有文献结论不同，在未纳入规模变量且经过季节性调整的模型中，H统计量（H-statistics）显示，整体银行业及特定细分群体均处于非竞争性市场当中。其中，大型银行具备较高的市场势力，而国有银行则拥有中等程度的市场势力，这与其经营决策中受到的各类政治干预特征相契合。