Competition in the Chilean banking Market: What the Boone indicator tell us?

Abstract

This paper provides new empirical evidence to the Chilean case about banking concentration and competition relationship. Using a panel data methodology for the period 2008-2009 and calculate the competitiveness Boone index, it evaluates the relationship between the market share and efficiency, measured by the marginal costs. Our analysis proves the existence of a positive and high empirical relationship between concentration and competition in the Chilean banking system. Moreover the facts show different level of competitiveness according to the banking portfolio.