- 1 - Strategic Groups in Austrian Banking 1995 - 2000

This paper applies the concept of strategic groups to the Austrian banking market. Based on balance sheet data of the largest 35 Austrian banks, we test the existence of strategic groups during the years 1995-2000 and analyse their dynamics and congruence with traditional banking sectors. We apply non-hierarchical cluster algorithms, regression analysis modeled after convergence analysis as common in growth economics, and match ratios. While we find strategic groups among the Austrian banks analysed, not all banks belong to strategic groups. Some of them seem to follow idiosyncratic strategies which call for further analysis. The congruence of strategic groups with the traditional banking sectors seems to diminish over the observed time period. In our sample, the members of two sectors (saving and joint stock banks) are hardly distinguishable with respect to their strategic orientation. The preliminary results shed new light on the usefulness of strategic group analysis in banking and on the relevance of traditional banking sectors for strategic analysis. * First draft in course of a research project under the guidance of Prof. Gerhard Fink, Research Institute for European Affairs (IEF), University of Economics and Business Administration, Vienna. The view expressed is that of the author and not necessarily that of affiliated institutions. Support by the Jubiläumsfonds der Oesterreichischen Nationalbank under project grant no. 7944 is gratefully aknowledged. The author would like to thank Peter Haiss and the participants of the IEF Europakolloquium for helpful comments.