Applied Seminar

Antonio Robles

U. Alicante


Seminar 3 – 14:30


The financial industry plays an important role in the allocation of financial resources. The main goal of this work is to analyze the market structure of the Colombian banking industry for the period between 1994 and 2014 and evaluate the welfare loss associated with existing market power using administrative data from bank’s official financial statements. I find that there is an increasing market power overtime with the associated increase in welfare loss, with a maximum welfare loss of 1.6% of GDP in 2014 that represents a 6% of Colombia’s total government budget. Furthermore, there is a dead weight loss of 1.23 COP per additional extra COP of profit generated by the banking industry.

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