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  • P-ISSN 1738-656X

KDI 정책연구. Vol. 25, No. 1, June 2003, pp. 55-98

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Assessing Concentration and Competition in Korean Banking Industry (Written in Korean)

Hyeon-Wook Kim

Author & Article History

Manuscript .


This paper examines the hypothesis that states consolidation and concentration within Korean banking industry have impaired competition and escalated market power of banks. Competition is measured using Bresnahan-Lau method, which estimates a structural model consisting of a demand function and a supply function of banking services, based on aggregate monthly data of January 1996 to December 2002. Estimations indicate that pricing behavior of Korean banks during the period is consistent with perfect competition, and they behave more competitively even after the increase in concentration ratio. The results imply that, contrary to the concerns over the potential for monopoly power, bank competition may not be damaged by the consolidation.


은행산업, 대형화, 경쟁도, BresnahanLau 방법

JEL Code

G18, G21, L11

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