ESTIMATION OF MONOPOLY POWER OF UZBEK COMMERCIAL BANKS BASED ON LERNER INDEX

Abstract

In this article, the Lerner index was used to assess the monopoly power of Uzbek banks. The Lerner index was estimated by calculating marginal costs based on the translog function of total costs. Banks operating in Uzbekistan in 1999-2018 were selected for the analysis. The analysis was conducted over the years based on the form of ownership of banks. It has been empirically proven that the monopoly power of banks has decreased over time. According to the form of ownership, banks were analyzed by state banks, joint-stock commercial banks, private banks, and foreign banks. The analysis showed that the state-owned banks had more monopoly power, while the private banks to a limited extent. The monopoly power of indirectly state-owned banks declined over time, as well as the average Lerner index of foreign banks has also declined. However, the monopoly position of foreign banks has increased compared to banks with other forms of ownership.