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The impact of evolving lending channels on the measurement of lending competition.

Visser, G. de (2017) The impact of evolving lending channels on the measurement of lending competition.

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Abstract:In academic literature, only ambiguous conclusions exist on the relationship between competition and financial stability, where only banks are taken into account in competition measures. The emergence and fast-growing marketplace lending competes with conventional types of lending in the same lending competition. After introducing the nature and development of marketplace lending, this study starts with a wide variety of competition measures in banking competition. We design our own comparative framework with conclusive and reflective criteria to assess three selected measures: the Lerner Index, Panzar & Rosse model and Boone Indicator. The result and conclusion is that the Boone Indicator is the best measure from literature to apply on the marketplace lending platforms and banks with additional requirements on collected data. Application of the Boone indicator to marketplace lending platforms and banks might result in a better measure of competition as a first step towards understanding the relationship between competition and financial stability.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:31 mathematics, 83 economics
Programme:Industrial Engineering and Management MSc (60029)
Link to this item:http://purl.utwente.nl/essays/71845
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