engleski

Performance analysis of the banking industry in the Republic of Croatia from 2001 to 2010

In ten years, from 2001 to 2010, the number of banks in Croatia decreased by ten, which affected the concentration of banks measured by the concentration index of the four largest banks, which increased from 60 to 65. According to the SCP paradigm (structure-conduct- performance paradigm) outlined by Mason and Bain the industry structure affects conduct of firms in the industry, which affects their performance. According to Mason the paradigm is consistent with the Neoclassical Theory of the Firm which assumes that there is a direct link between the industry structure, entrepreneurial conduct and performance. The basic principle of this paradigm might be the ability of entrepreneurs to exercise market power in a concentrated industry. High industry concentration is correlated with high profits, especially if the concentration level exceeds a certain critical level under the condition that there are some barriers to entry of new entrepreneurs in the industry. It is expected that there has been growth performance of banking industry, so we will work to analyze their changes. We will investigate whether the size of banks, measured by its assets, has an impact on their level of success. For research purposes the bank will be divided, with respect to the value of their assets into four categories.

banking industry ; SCP ; level of success ; level of concentration

nije evidentirano