Market Structure in Iranʹʹs Banking Sector: An Application of Multilevel Models

ساختار بازار در بخش بانكداري ايران: كاربرد الگوهاي چندسطحي

This paper analyzes Iranʹs banking market structure, using unbalanced panel data models during 1997-2009. To study the market structure, various measures of market concentration are examined theoretically and the U index of concentration is applied to Iranʹs banking system. The results show that, along with the commencement of privatization in Iranʹs banking sector (2001), U index of concentration has tended to decrease, indicating that competition in Iranʹs banking market has intensified. However, this may not happen until the strict regulations on private banks are relaxed.