ABSTRACT: Level of concentration is an amount of structure and level of competition or collusion among industries which affects industry performance. As a result, the raise of market concentration will cause the raise of collusive behavior than competition. This condition leads industries to set higher price to increase their profit. Although structural approach has a weakness, where market concentration variable which is frequently substituted with the proxy of concentration ratio which is always treated as exogenous variable, whereas theoretically, concentration ratio is endogenous variable and as a result the manner of its effect is not always from concentration to profit, but can also happen contrary, therefore non-structural approach emerged based on Panzer and Rosse Model (1987). Analysis of banking industry competition can be conducted by applying structural and non-structural approach. In structural approach, competition level is assessed from the change of market concentration and power level. Meanwhile in non-structural approach, competition level is assessed from company cost structure. Many researches using structural approach show that concentration level or efficiency can affect performance, while by using non-structural approach, researches show that banks perform monopoly competition.
Keywords: Structural Approach; Non-Structural Approach; Banking Industry
Penulis: Rizky Yudaruddin
Kode Jurnal: jpmanajemendd120254
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