COMPETITION AND CONTESTABILITY IN CENTRAL AND EASTERN EUROPEAN BANKING MARKETS

This abstract will be reformatted upon submission. You don't need to format for line-breaks here!!!!! This will be a new paragraph but you can't indent - sorry. This study analyzes the evolution of competitive conditions in the Banking industries of fourteen Central and Eastern European (CEE) transition economies using firm-level data. The results of the competition analysis suggest that the banking markets of CEE countries cannot be characterized by the bipolar cases of either perfect competition or monopoly over 1993-2000 except for FYR of Macedonia and Slovakia. That is, banks earned their revenues as if operating under conditions of monopolistic competition in that period. Furthermore, the cross-sectional analysis of competitive structure reveals initially a decreasing trend between 1993 and 1996 and a subsequent increasing trend in competitive conditions after 1996. Large banks in transition countries operate in a relatively more competitive environment compared to small banks, or in other words, competition is lower in local markets compared to national and international markets.Bank Competition; Contestability; Transition Economies

Nonlinear Properties, Complexity, and Emergence in the Governance Of the World Trade Organization

Immediately after World War II the allied powers began what would be a slow march towards a worldwide economic and political order. They established an organization for political and military crises (the United Nations), economic rehabilitation (the International Monetary Fund), facilitation of capital transfers (the World Bank), and promotion of free trade among nations (the World Trade Organization). These organizations did, however, institute (or tried to institute) change from the top down, which reflected the prevailing philosophy of the time. The problem was and is that these organizations ignored inevitable change from the bottom up. The very fact of national sovereignty precluded a top down imposition of a world economic order. Instead, a peculiar interaction has been occurring between this top down rules and bottom up reactions that can best be explained through chaos, or complexity theory. These elements (both nations and international organizations) may be likened to individual units in social space. Each individual unit is influenced both by the surrounding units (i) and by factors in its immediate environment (е). The presence of self-reinforcing (feedback) behavior ensures reverse causality whereby the individual unit influences its environment, which in turn, influences the individual unit. In this system, the total number of inputs equals the total number of elements in the system (i+ е) = N. In a binary system of this magnitude, where N is a large number like the WTO membership (W = 152 countries), chaos is likely to ensue. With nations and international organizations problems may come in two different ways. The first is when N ≤ 2, an ordered system emerges, because the elements have “low connectivity” to inputs. In this, the system withstands small perturbations and returns shortly to its original attractors; this homeostatic property also implies that significant behavioral (or permanent) changes can be achieved only by the introduction of major perturbations in the system. In the same vein, in a system with “high connectivity” order can also emerge if there exist biased “Boolean Switching Rules”. The current movement to worldwide economic order represents the introduction of specific “point attractors” to bring nations into global equilibrium. Unfortunately, these attractors are being introduced from the “top-down” by the wealthiest nations of the world. Hence, despite the presence of such “point attractors” as outlined above, the top-down approach also has the effect of incorporating strange attractors from the local systems. This paper discusses the adaptive complexity of designing and implementing world governance rules to sustain the survival and growth of the WTO. The paper utilizes the methodologies of “adaptive complex systems” and “evolutionary economics” and highlights its arguments by employing clinical studies from the U.S.A. Latin America, and Africa.Numéro Spécial « Special Issue on Nonlinear Financial Analysis :Editorial Introduction » Guest Editor :Catherine Kyrtsouinfo:eu-repo/semantics/publishe