Bank pricing under oligopsonistic-oligopoly
We propose a generic oligopsony-oligopoly model to study bank behavior under uncertainty in developing countries. We derive a pricing structure that acknowledges market power in both the deposit and loan markets and identify two theoretical components to the loan rate: a rent extraction component re...
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2012
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| Online Access: | http://hdl.handle.net/10725/7312 http://dx.doi.org/10.2139/ssrn.2004294 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2004294 |
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| _version_ | 1864513481824272384 |
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| author | Marrouch, Walid |
| author2 | Turk-Ariss, Rima |
| author2_role | author |
| author_facet | Marrouch, Walid Turk-Ariss, Rima |
| author_role | author |
| dc.creator.none.fl_str_mv | Marrouch, Walid Turk-Ariss, Rima |
| dc.date.none.fl_str_mv | 2012 2018-04-03T08:35:45Z 2018-04-03T08:35:45Z 2018-04-03 |
| dc.identifier.none.fl_str_mv | 9.78952E+12 http://hdl.handle.net/10725/7312 http://dx.doi.org/10.2139/ssrn.2004294 Marrouch, W., & Turk-Ariss, R. (2012). Bank pricing under oligopsony-oligopoly: Evidence from 103 developing countries, BOFIT Discussion Papers 1/2012. http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2004294 |
| dc.language.none.fl_str_mv | en |
| dc.publisher.none.fl_str_mv | SSRN |
| dc.rights.*.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.title.none.fl_str_mv | Bank pricing under oligopsonistic-oligopoly evidence from 103 developing countries |
| dc.type.none.fl_str_mv | Conference Paper / Proceeding info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/conferenceObject |
| description | We propose a generic oligopsony-oligopoly model to study bank behavior under uncertainty in developing countries. We derive a pricing structure that acknowledges market power in both the deposit and loan markets and identify two theoretical components to the loan rate: a rent extraction component resulting from the interaction between the choke price of loans and prevailing banking structures, and a markup on deposit funding costs that captures the transformation efficiency of financial intermediation. We then test our structural specification with longitudinal data for 103 non-OECD countries and find that both the market structure under uncertainty and the deposit rate matter significantly in pricing. However, the role played by the rent-extraction share in pricing, on average, dominates funding costs in developing countries, and so underscores the importance of market structure in banks’ pricing power. |
| eu_rights_str_mv | openAccess |
| format | conferenceObject |
| id | LAURepo_8abe01dc7cdad23373fa4b148b1d4653 |
| identifier_str_mv | 9.78952E+12 Marrouch, W., & Turk-Ariss, R. (2012). Bank pricing under oligopsony-oligopoly: Evidence from 103 developing countries, BOFIT Discussion Papers 1/2012. |
| language_invalid_str_mv | en |
| network_acronym_str | LAURepo |
| network_name_str | Lebanese American University repository |
| oai_identifier_str | oai:laur.lau.edu.lb:10725/7312 |
| publishDate | 2012 |
| publisher.none.fl_str_mv | SSRN |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
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| spelling | Bank pricing under oligopsonistic-oligopolyevidence from 103 developing countriesMarrouch, WalidTurk-Ariss, RimaWe propose a generic oligopsony-oligopoly model to study bank behavior under uncertainty in developing countries. We derive a pricing structure that acknowledges market power in both the deposit and loan markets and identify two theoretical components to the loan rate: a rent extraction component resulting from the interaction between the choke price of loans and prevailing banking structures, and a markup on deposit funding costs that captures the transformation efficiency of financial intermediation. We then test our structural specification with longitudinal data for 103 non-OECD countries and find that both the market structure under uncertainty and the deposit rate matter significantly in pricing. However, the role played by the rent-extraction share in pricing, on average, dominates funding costs in developing countries, and so underscores the importance of market structure in banks’ pricing power.N/ASSRN2018-04-03T08:35:45Z2018-04-03T08:35:45Z20122018-04-03Conference Paper / Proceedinginfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/conferenceObject9.78952E+12http://hdl.handle.net/10725/7312http://dx.doi.org/10.2139/ssrn.2004294Marrouch, W., & Turk-Ariss, R. (2012). Bank pricing under oligopsony-oligopoly: Evidence from 103 developing countries, BOFIT Discussion Papers 1/2012.http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.phphttps://papers.ssrn.com/sol3/papers.cfm?abstract_id=2004294eninfo:eu-repo/semantics/openAccessoai:laur.lau.edu.lb:10725/73122021-03-19T09:10:16Z |
| spellingShingle | Bank pricing under oligopsonistic-oligopoly Marrouch, Walid |
| status_str | publishedVersion |
| title | Bank pricing under oligopsonistic-oligopoly |
| title_full | Bank pricing under oligopsonistic-oligopoly |
| title_fullStr | Bank pricing under oligopsonistic-oligopoly |
| title_full_unstemmed | Bank pricing under oligopsonistic-oligopoly |
| title_short | Bank pricing under oligopsonistic-oligopoly |
| title_sort | Bank pricing under oligopsonistic-oligopoly |
| url | http://hdl.handle.net/10725/7312 http://dx.doi.org/10.2139/ssrn.2004294 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2004294 |