Housing

• Abstract
  This paper extends Boone (2008) by introducing a competition measure at the individual
  firm level rather than for an entire market segment.
• We apply this extended Boone indicator to individual bank-level competition
  in the loan market in the four largest euro area countries and Austria.
• Our new measure of firm-level competition enriches and complements
  other competition measures and provides a promising starting point for future market
  power analyses.
• The only measure among non-structural measures that is based on the
  concept of competition as a process of rivalry is the Boone (2008) indicator.
• We introduce
  a new performance measure of competition by extending the Boone indicator to the
  individual firm level.
• Introduction
  The ability to reliably measure competition is valuable to researchers, analysts, and
  policymakers, especially antitrust authorities, financial supervisors, and central banks.
• One broad
  category of indicators often used to measure competition are structural competition
  measures, such as static concentration measures, and dynamic measures, e.g., entry and
  exit rates.
• Out of these measures, the only measure based on the
  concept of competition as a process of rivalry is the Boone indicator.
• This study introduces a new performance measure of competition by extending the
  Boone indicator to the individual firm level.
• It thus measures the
  increase in profits in percent of one percentage point increase in efficiency, with marginal
  costs as measure of efficiency.
• We extend the theoretical
  underpinning of the measurement of competition for the entire market of Boone (2008) by
  a new measure of individual firm-level competition.
• A concern of the literature is the gap
  between the practical application and the theoretical framework of Boone (2008).
• We introduce within the same theoretical
  framework a new measure of competition on firm level, the MRP.
• Our new
  measure significantly augments the antitrust evaluative framework by shedding light on
  whether a merger results in a less competitive market.
• Our novel indicator focuses on
  firms? incentives to enhance their relative efficiency, as manifested in the elasticity
  between relative profits and efficiency.
• However, an inefficient firm that is foreclosed could be more
  competitive than the larger efficient firm that relies on its scale economies.
• Our new metric of competition unveils
  banks? ability to influence their profitability in the short term by cutting costs relative to
  their peers.
• The new MRP indicator provides the ability to assess the impact
  of individual banks? competitiveness on their interest rate-setting behaviour in loan
  markets.
• Incorporating this information promises a more refined understanding of the impact and
  timing of monetary policy rates changes on the real economy.
• Section 3 introduces within the Boone
  (2008) theoretical framework our new measure of individual firm-level competition,
  including the interpretation of the MRP.
• Section 4 provides an application of our new
  ECB Working Paper Series No 2925

  6

  individual firm-level competition measure to the loan market.

• The StructureConduct-Performance paradigm (SCP) provides a traditional framework in the field of
  industrial organization for analysing competition behaviour in markets.
• Concentrated
  markets ease the possibilities to collude implicitly or explicitly and therefore concentrated
  markets result in higher prices and profits.
• For example, a tougher competition
  setup may lead to a reallocation of market shares, potentially forcing some firms to exit
  the market.
• This approach gives firms? strategic behaviour
  central stage and focuses on the strategic interaction on prices and quantities, known as
  conjectural variation.
• Another measure from
  this strand of literature is the H-statistic developed by Panzar and Rosse (1987).
• The only competition measure from this performance literature where competition is the
  outcome from a process of rivalry is the Boone indicator.
• A continuous and monotonically increasing relationship exists between
  RPD and the level of competition if firms are ranked by decreasing efficiency.
• (2013) compare the Boone indicator with the price-cost margin
  and conclude that the profit elasticity is a more reliable measure of competition.
• The high
  elasticity of profits to efficiency unequivocally indicates that the high market shares and
  therefore high profits are due to high efficiency.
• A firm that quickly passes changes to the input prices is seen as a price
  taker with little market power.
• Indicators of competition tend to measure different phenomenon and may provide
  conflicting messages, as reported for European banking by Carbo et al.
• Application 2: Test the ?quiet life? and related market structure hypotheses using the
  MRP as competition or market structure measure.
• Data
  Our application to individual bank-level competition in the euro area loan market uses
  balance sheet and income statement data from the Moody?s Analytics BankFocus for the
  calendar years 2013-2020.
• As such, most publications
  on competition in the euro area includes the largest four member states.
• Due to these restrictions the database was reduced to an unbalanced panel of up to 1862
  banks (depending on the year) from five euro area countries.
• Application 1: Measure bank competition using MRP
  Looking at the distribution of the MRP for individual banks (Fig.
• A similar finding for the four largest euro area countries as a group is
  reported in Carbo et al.
• Application 2: Test of market structure hypotheses using MRP
  Our new measure of individual-bank competition can be used to test market structure
  theories.
• Euro area banks? market power,
  lending channel and stability: the effects of negative policy rates, European Central Bank
  Working Paper, 2790 (February).
• A
  new approach to measuring competition in the loan markets of the euro area, Applied
  Economics, 43 (23), 3155?3167.
• Impact of bank competition on the interest rate pass-through in the euro area, Applied
  Economics, 45 (11), 1359?1380.

• When Peter Dutton took the Coalition reins in 2022 after a humiliating loss of office, his first priority was unity.
• A punchy and well-schooled parliamentarian, Dutton knew that if ever he was to contest the prime ministership, his primary challenge was to make it to the next election.
• The alienation this policy creates among mainstream urban voters could more than offset its popularity in the joint party room (particularly within the anti-renewables Nationals).
• They joined Warringah (NSW) on Sydney’s North Shore, lost spectacularly in 2019 to the original “teal”, Zali Steggall.
• Read more:
  Labor's unexpected Aston win is body blow for Dutton

  The bad news has kept on coming.

• That needless act, and the brash language justifying it, brought no interjection from Dutton.
• It was an example of just the kind of braggadocio that could see even more Liberal women heading for the exits.

Mark Kenny does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

• BayWa AG closes the financial year 2023 with operating earnings of €304.0 million, just below the forecast for the year.
• After deducting interest and tax, BayWa closed the past financial year with a loss of €93.4 million, down €332.9 million year on year.
• “We are using 2024 for consolidation,” says Marcus Pöllinger, Chief Executive Officer of BayWa AG.
• BayWa anticipates strong earnings growth in the current financial year, largely driven by a good apple harvest in New Zealand.

• Unsecured social bond with a volume of € 850 million and a maturity of 10 years issued.
• The bond with a total volume of € 850 million and a coupon of 4.25% was 4.8 times oversubscribed.
• “This ten-year social bond is a proof that we can combine our social responsibility with our excellent access to the capital market.
• We are therefore already using this bond to plan our liquidity from Q3 2025.”
  The social bond is used to finance social projects.