Bank consolidation and competitiveness: Empirical evidence from the Korean banking industry

► This paper examines the competitiveness of the Korean banking industry after consolidation. ► It analyzes the degree of competition within an improved Panzar and Rosse model, which uses cross-sectional data to assess the competitive behavior of banks. ► H-statistics results reveal the existence of monopolistic competition in the market. ► There is evidence of improvements in bank competition and profitability after consolidation. ► These results contradict the belief of increased risk and lower competition within this concentrated system.