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Entrepreneurship and Sustainability Issues Open access
Journal Impact FactorTM (2022) 1.7
Journal Citation IndicatorTM (2022) 0.42
Received: 2019-01-10  |  Accepted: 2019-04-08  |  Published: 2019-06-30

Title

Studying the banking industry’s stability through market concentration indices


Abstract

The optimal market structure is one of the fundamental issues of economic theory. At that, companies’ efficiency in the market is associated with resource availability as a whole and finance resources, in particular. The structure of the banking market in terms of commercial loans determines a number of parameters of the economic system, such as its stability, growth potential, entrepreneurial activity, the state of commodity markets, the competitiveness of companies, etc. A comparative analysis of countries in terms of the ratio of commercial loans to GDP allows us to identify promising markets and strategic avenues for the development of the global banking industry and investment policy. However, a lack of regular and timely statistical reviews often impedes the identification. With the view to performing a comparative analysis for the EA/ЕU macroregion, the authors attempt to establish the types of the banking market in Russia based on a fuzzy rank approach using the probability theory. Using the data for 2009–2018, the authors assess bank concentration in Russia by a number of indicators. During the period under review, the volume of commercial banking lending in Russia experienced a steady increase. At the same time, there is a clear downward trend in the number of banks; several local “breakdowns” happen once every two years, i.e. the compression rate is reducing. Within the framework of the accepted gradation, the values of concentration indices taken separately do not allow arriving at a firm conclusion, since they indicate contradictory statuses of the sectoral market type. The integrated approach proposed in the paper helped find that, despite a relatively large number of participants in the Russian banking market, it should be primarily identified with a monopoly. At that, the values of the Herfindahl-Hirschman Index (HHI) and standard concentration fall within the oligopoly boundaries. This indicates the fuzzy nature of the sectoral market. The empirical results obtained are of use when analyzing competition, developing antimonopoly regulation measures, adjusting the banking sector development strategy and investment policy.


Keywords

sectoral concentration, competition, stability, banking industry, commercial lending, economic growth, Russia, EA/ЕU macroregion


JEL classifications

D40 , G21 , M20


URI

http://jssidoi.org/jesi/article/311


DOI


Pages

1663-1679


Funding

The paper was prepared in accordance with the 2019 Research Plan of the Institute of Economics of the Ural branch of the Russian Academy of Sciences

This is an open access issue and all published articles are licensed under a
Creative Commons Attribution 4.0 International License

Authors

Chunikhin, Sergey A.
Tyumen Industrial University, Tyumen, Russian Federation https://www.tyuiu.ru
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Kuzmin, Evgeny A.
Institute of Economics, the Ural Branch of Russian Academy of Sciences, Yekaterinburg, Russian Federation http://www.uiec.ru
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Pushkareva, Luidmila V.
Russian Presidential Academy of National Economy and Public Administration, Moscow, Russian Federation https://www.ranepa.ru
Articles by this author in: CrossRef |  Google Scholar

Journal title

Entrepreneurship and Sustainability Issues

Volume

6


Number

4


Issue date

June 2019


Issue DOI


ISSN

ISSN 2345-0282 (online)


Publisher

VšĮ Entrepreneurship and Sustainability Center, Vilnius, Lithuania

Cited

Google Scholar

Article views & downloads

HTML views: 3887  |  PDF downloads: 1709

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