Market Structure and Competition in the Peruvian Financial System during the period 2011–2022
DOI:
https://doi.org/10.26867/Keywords:
Competition, Concentration, Panzar-Rosse model, Financial systemAbstract
The present study analyzes market structure and its relationship with the level of competition in the Peruvian
financial system during the period 2011–2022. A quantitative, non-experimental, and explanatory approach is employed, using concentration indicators such as the concentration ratio and the Herfindahl–Hirschman Index, as well as competition measures based on the Panzar–Rosse, Lerner, and Boone models. The analysis is conducted using balanced panel data from 45 financial institutions supervised by the Superintendency of Banking, Insurance, and Pension Funds. The results reveal a high level of concentration, particularly in the multiple banking sector, with concentration ratios ranging from 72% to 77% and Herfindahl–Hirschman Index values between 1500 and 1760. The H-statistic, with a value of 0.78, indicates a monopolistic competition environment. The Lerner and Boone indices initially reflect high levels of competition; however, both exhibit a declining trend over the analyzed period. Additionally, the banking sector is observed to maintain greater market power compared to the non-banking segment. In conclusion, the Peruvian financial system is characterized by high concentration and monopolistic competition, with competition levels progressively
decreasing as market power increases
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