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Market Power and Market Structure: An Analysis of Costa Rican Banking since 2008
  • Autor(es) Miguel Cantillo, José Cascante, Guillermo Pastrana
  • Enlace   IR AL ARCHIVO
  • Tipo Documentos de Trabajo
  • Fecha de
    Marzo 2022

This paper analyzes the evolution of the Lerner index for Costa Rican banks between 2008 and 2019. We document a significant drop in market power during this period, which we relate to less concentration in loans and deposits. The market became less consolidated as a fringe of 29 small banks gained market share at the expense of large and medium banks. We find that for individual banks, a greater market share of loans, and greater loan specialization are related to higher profitability, while a greater market share of deposits and greater size are related to lower profit margins.