An Investigation into the Relationship between Competition in Industry and Efficiency in Banks, Insurance Companies and other Financial Intermediaries Listed in Tehran Stock Exchange

Aliakbar Hosseinzadeh, Mohammad Mahmoodi

Abstract


Todays’ world is the world of competition among business enterprises to seize the market and attract the customers. Accordingly, the main focus of the competition is to employ methods and strategies to attract customers. Competition is among the issues that economists always speak of as a strategy for economic growth and optimal utilization of economic resources. Increased competition and efficiency in market may result in an increase in the quality and diversity of services and decrease in costs. In this study, it was attempted to examine the relationship between competition in industry and efficiency in banks, insurance companies, and other financial intermediaries listed in Tehran Stock Exchange. In this regard, data of 28 banks, insurance companies, other financial intermediaries as well as panel data model were used. The results indicated that there is a significant and direct relationship between concentration in industry and enhancement of market power and the efficiency of banks, insurance companies and other financial intermediaries listed in Tehran Stock Exchange.


Keywords


competition in industry, efficiency, profitability.

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