Measuring competition using the Boone relative profit difference indicator

•Competition test (Boone) relates normalised profitability to normalised efficiency.•The paper suggests an operational statistical test to implement this idea.•Use pooled sample of firms covering different periods to cluster the observations.•Estimated by polynomial quantile regression with Wald test.•The test is used with a pooled sample of banking systems in emerging economies.

This paper suggests a method for implementing the theoretical relative profit difference test for intensity of competition due to Boone (2008). An empirical illustration is given for banking systems in emerging economies