Measuring competition in Portuguese commercial banking during the Golden Age (1960-1973)

摘要

The institutional environment of Portuguese banking during the Golden Age of economic growth (1950-1973) has been criticised in many accounts. According to various authors, on the one hand it would have granted excessive protection to existing banks, allowing them to obtain high rents, a disincentive for them to compete; on the other, it would have forced them to concentrate their activity excessively on short-term credit instruments, thereby preventing them from contributing effectively to finance growth. In this article we use a formal statistical approach of the Panzar-Rosse type and conclude that the system did, in fact, have some interesting competitive features.