Market Structure in Iran''s Banking Sector: An Application of Multilevel Models

This paper analyzes iran's banking market structure, using unbalanced panel data models during 1997-2009. to study the market structure, various measures of market concentration are examined theoretically and the u index of concentration is applied to iran's banking system. the results show that, along with the commencement of privatization in iran's banking sector (2001), u index of concentration has tended to decrease, indicating that competition in iran's banking market has intensified. however, this may not happen until the strict regulations on private banks are relaxed.