Assessing lending market concentration in Bulgaria: the application of a new measure of concentration

摘要: 1. Introduction The issue of the measures concentration is a long-standing debate. most frequently applied measure concentration, at least in banking, Herfindahl-Hirshman Index (HHI). It used, for instance, studies focusing on relationship between market structure and banks' performance, but also by banking authorities to examine impact competition eventual mergers acquisitions (2). Despite its popularity, this much criticised. Its frequent usage due fact that it simple calculate. Another simply constructed Entropy (EI). was assess industrial firms' strategy, and, our knowledge, never banking. construction principle same as HHI, weights attached shares are only different: HHI assigns higher whereas EI lower weights. Thus, both indexes subject "weight bias". Many other have been proposed. Among them, share inequality Rhoades (1995) reveal among firms even within markets with similar HHIs. Nevertheless, they not exempt from some weaknesses. As mentions, two them very sensitive about number firms, which increase rapidly increment firms. difference largest smallest shares. latter has, measures, weight bias, placing greater larger differences. Two used Hannan (1997) along part order their effects bank deposit loan rates. His results inconclusive explaining interest For loan-rate analysis, arises influences small business Even if transformations made, all these completely exempted effect An original research Melnik et al. (2008) where authors propose dominance disclose firm dominant position. reason has limited assessing (3). neither nor gauge so study. In opinion, must be influenced entities existing market, own should determine concentration. This could easily corrected normalisation EI, take values zero one regardless market. However, bias characterises will always present. discussed below, sensitivity makes different rates evolution, sense evolution same. we introduce paper avoids problems. work presents twofold interest. First, new methodology estimate index any bias. based approach Gini allows determination shape Lorenz curve. We use sectoral lending Bulgaria. therefore each economic activity portfolio. provides information distribution across sectors. case sectors receiving funding corresponds what call beta-concentration. …