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Sylwester Kozak Agata Wierzbowska


The importance of the question about the relationship between concentration and efficiency lies in the fact that banks’ efficiency affects ability to extend loans and ensure financial stability of the banking sector. The study examines this relationship on the example of 150 banks operating between 2005 and 2019 in 11 EU and 8 non- EU countries from the SECE region. The value of profit efficiency was assessed with the stochastic frontier approach, and next regressed with the banking market concentration and bank specific and macroeconomic explanatory variables. The results for the entire sample as well as for domestic and foreign-owned banks indicate that concentration positively and nonlinearly impacts bank efficiency, both in EU and non-EU countries. Moreover, the size of a bank and income diversification help to improve efficiency of banks in the SECE region. The study shows that banks in SECE countries seem to follow the efficient structure hypothesis.

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How to Cite
Kozak, S., & Wierzbowska, A. (2021). BANKING MARKET CONCENTRATION AND BANK EFFICIENCY. EVIDENCE FROM SOUTHERN, EASTERN AND CENTRAL EUROPE. The South East European Journal of Economics and Business, 16(1), 38-52. Retrieved from
Scientific and Professional papers: Economics and Business
Author Biographies

Sylwester Kozak, National Bank of Poland, and Warsaw University of Life Sciences-SGGW

Sylwester Kozak got his PhD habilitation degree in Finance at the Cracow University of Economics based on the dissertation “Competition in the banking and insurance sectors”, and his PhD in Economics at the Technical University of Radom, the Faculty of Economic Sciences based on the dissertation “Consolidation processes in the US banking system in 1991-2000 and its economic effects”. In 1996 he was accepted to a one-year scholarship from Georgetown University where he studied finance and banking at the University of Wisconsin, La Crosse. Currently he is an associate professor at the Institute of Economics and Finance of the WULS-SGGW teaching in Polish and English the subjects related to financial markets and institutions and finance. He is an economic expert at the Department of Financial Stability of the National Bank of Poland and the coauthor of analytic reports prepared by the National Bank of Poland on: financial sector development, financial stability and banks’ lending policy.

Agata Wierzbowska, Graduate School of Economics, Kobe University

Agata Wierzbowska, PhD
Associate Professor
Graduate School of Economics
Kobe University