Market power, social welfare, and efficiency in the Peruvian microfinance

IF 2.8 4区经济学 Q1 ECONOMICS Economia Politica Pub Date : 2024-01-18 DOI:10.1007/s40888-023-00321-y

Giovanna Aguilar, Jhonatan Portilla

引用次数: 0

Abstract

This study quantifies the social welfare loss caused by market power in Peru’s regulated microfinance industry and analyzes its effect on microfinance institutions’ (MFIs) efficiency from 2003 to 2019. We estimate the efficiency-adjusted Lerner index as a measure of market power and obtain efficiency scores via cost and profit stochastic frontiers estimation using data from a wide panel of MFIs. Additionally, to analyze the effect of market power on the MFI’s efficiency, we estimate a fixed effects model with instrumental variables to correct the endogeneity problem. The results show that the welfare loss due to market power in Peru’s regulated microfinance industry has increased from 0.12% of GDP in 2003 to 0.27% in 2019. It is also found that market power positively affects Peruvian MFIs’ efficiency. Therefore, reducing market power leads to a welfare gain by lowering the social welfare loss (Harberger’s triangle) and a welfare loss due to decreased efficiency in MFIs. However, we find that reducing market power leads to a positive net effect on social welfare due to greater welfare gain than loss.

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秘鲁小额信贷的市场力量、社会福利和效率

本研究量化了秘鲁受监管的小额信贷行业中市场力量造成的社会福利损失，并分析了 2003 年至 2019 年市场力量对小额信贷机构效率的影响。我们估算了效率调整后的勒纳指数（Lerner index），将其作为衡量市场支配力的指标，并利用广泛的小额信贷机构面板数据，通过成本和利润随机前沿估算获得效率得分。此外，为了分析市场支配力对小额贷款机构效率的影响，我们估计了一个带有工具变量的固定效应模型，以纠正内生性问题。结果显示，在秘鲁受监管的小额信贷行业中，市场支配力造成的福利损失从 2003 年占国内生产总值的 0.12% 增加到 2019 年的 0.27%。研究还发现，市场支配力会对秘鲁小额信贷机构的效率产生积极影响。因此，减少市场支配力会降低社会福利损失（哈伯格三角），从而带来福利增益，同时也会因小额金融机构效率下降而带来福利损失。然而，我们发现，由于福利收益大于福利损失，降低市场支配力会对社会福利产生积极的净影响。

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来源期刊

Economia Politica ECONOMICS-

CiteScore

3.90

自引率

5.60%

发文量

期刊介绍： This journal publishes peer-reviewed articles that link theory and analysis in political economy, promoting a deeper understanding of economic realities and more effective courses of policy action. Established in 1984, the journal has kept pace with the times in disseminating high-quality and influential research aimed at establishing fruitful links between theories, approaches and institutions. With this relaunch (which combines Springer’s worldwide scientific scope with the Italian cultural roots of il Mulino and Fondazione Edison, whose research has been published by the two mentioned publishers for many years), the journal further reinforces its position in the European and international economic debate and scientific community. Furthermore, this move increases its pluralistic attention to the role that – at the micro, sectoral, and macro level – institutions and innovation play in the unfolding of economic change at different stages of development.