Purpose: Banks are institutions that inject money in the economy and help to boost it when there are problems in some markets, especially in productive sectors. In this way, analysing the competition in this sector is an important tool for policymakers as non-competitive behaviour could affect the financial system and economy. The purpose of this paper is to measure the degree of competition in the Ecuadorian private banking sector divided by size, from 2000 to 2015, using panel data collected by the official regulator institution. Design/methodology/approach: The authors applied the model proposed by Panzar and Rosse (1987) and its H-statistic using a reduced price and revenue equation estimated by pooled ordinary least squares, fixed effects, random effects, feasible generalised fixed effects and panel correction standard errors (PCSE). Findings: The authors show that given the presenc...

Purpose: Banks are institutions that inject money in the economy and help to boost it when there are problems in some markets, especially in productive sectors. In this way, analysing the competition in this sector is an important tool for policymakers as non-competitive behaviour could affect the financial system and economy. The purpose of this paper is to measure the degree of competition in the Ecuadorian private banking sector divided by size, from 2000 to 2015, using panel data collected by the official regulator institution. Design/methodology/approach: The authors applied the model proposed by Panzar and Rosse (1987) and its H-statistic using a reduced price and revenue equation estimated by pooled ordinary least squares, fixed effects, random effects, feasible generalised fixed effects and panel correction standard errors (PCSE). Findings: The authors show that given the presenc...

Purpose: This paper aims to determine causal relationships between the level of productive credit, real deposits and money demand – all of them in real terms – and Gross National Product between 2006 and 2020. Design/methodology/approach: The vector autoregressive technique (VAR) was used, where data from real macroeconomic aggregates published by the Central Bank of Ecuador (BCE) are correlated, such as productive credit, gross domestic product (GDP) per capita, deposits and money demand. Findings: The results indicate that there is no causal relationship, in the Granger sense, between GDP and financial activity, but there is between the growth rate of real money demand per capita and the growth rate of total real deposits per capita. Originality/value: The study shows that bank credit mainly finances the operations of current assets and/or liabilities. In addition, economic agents ...