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ARE GOVERNMENT BANKS LESS COMPETITIVE THAN PRIVATE BANKS? EVIDENCE FROM INDONESIAN BANKING


 
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1. Title Title of document ARE GOVERNMENT BANKS LESS COMPETITIVE THAN PRIVATE BANKS? EVIDENCE FROM INDONESIAN BANKING
 
2. Creator Author's name, affiliation, country Tri Mulyaningsih; Universitas Sebelas Maret; Indonesia
 
2. Creator Author's name, affiliation, country Anne Daly; University of Canberra; Australia
 
2. Creator Author's name, affiliation, country Phil Lewis; University of Canberra; Australia
 
2. Creator Author's name, affiliation, country Riyana Miranti; University of Canberra; Australia
 
3. Subject Discipline(s)
 
3. Subject Keyword(s)
 
4. Description Abstract

Literature suggests that compared to private banks, state-owned banks have lower incentives to maximize profit. This study aims to investigate the possible different competitive behaviour of state-owned banks and private banks. The recent refinement of Panzar-Rosse method by Bikker, Shaffer, and Spierdijk (2011) was employed to estimate the competitive behaviour of state-owned and private banks. The empirical estimation of Fixed-Effect approach shows that the H-statistics of the state-owned banks was significantly smaller than of the private banks. It implies that private banks behaved more competitively than the state-owned banks. The private bank market was close to perfect competition or monopolistic competition where bank products are regarded as perfect substitutes for one another. In contrast, state-owned banks attempted to collude rather than to compete to generate a maximum profit. State-owned banks behaved less competitive because they served the interest of government or politician, have a long hierarchical organisational design, receive an interest rate subsidies and an implicit guarantee from government against failure and their business are being controlled by government.

Keywords: Bank ownership, competitive behaviour, Panzar-Rosse

 
5. Publisher Organizing agency, location MESP–FEB UNS
 
6. Contributor Sponsor(s)
 
7. Date (YYYY-MM-DD) 2024-07-09
 
8. Type Status & genre Peer-reviewed Article
 
8. Type Type
 
9. Format File format PDF
 
10. Identifier Uniform Resource Identifier https://jurnal.uns.ac.id/jaedc/article/view/89994
 
10. Identifier Digital Object Identifier (DOI) https://doi.org/10.20961/jaedc.v1i1.89994
 
11. Source Title; vol., no. (year) Journal of Applied Economics in Developing Countries; Vol 1, No 1 (2014): Journal of Applied Economics in Developing Countries
 
12. Language English=en en
 
13. Relation Supp. Files
 
14. Coverage Geo-spatial location, chronological period, research sample (gender, age, etc.)
 
15. Rights Copyright and permissions Copyright (c) 2014 Tri Mulyaningsih, Anne Daly, Phil Lewis, Riyana Miranti
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This work is licensed under a Creative Commons Attribution 4.0 International License.