A Study of the Competitiveness of the Iran's Banking System

In this article the Panzar & Rosse approach was employed to assess the level of competitiveness of the Iranian banking system during 1997-2010. We used panel data for all the 18 banks (private and public) that had been commercially active for at least the last four years. The results indicate that during the period of the study the banking system has been operating under a monopolistic competition system. Using a dummy variable we also were able to show that the competition among the private banks has been stronger than the public banks. And finally the results indicate that with the more private banks entering the market the competition of the whole banking system has improved.