I explore the effect of the structure of the banking market on the performance of manufacturing sectors. The theoretical papers offer ambiguous explanations regarding the effects of banking market structure on the size of manufacturing sectors, and empirical studies that use cross country data do not reach a consensus on these effects. By using the Panzar-Rosse method to estimate a ". H-statistic" competition index and conventional concentration indices, I provide evidence that industries that rely more on external financing perform better in countries where the banking competition is lower, and the banking concentration is greater.
All Science Journal Classification (ASJC) codes
- Economics and Econometrics