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Given that 'market discipline' essentially embodies implicit regulation in ways that makes it theoretically more effective in efficient markets, we use data from twenty emerging markets to examine its effect on banking competition in the typically less than efficient emerging markets. Using a new set of market discipline constructs that reflect market discipline across both developed and emerging markets, and deploying panel data estimation, we find that market discipline - measured from the perspectives of external stakeholders, market activities, or representative overall market discipline conduct - is important in emerging markets. And these constructs appear to enhance competition in these banking markets, whereas a robustness check using subordinated debt activity as a proxy for market discipline rather increases market power in emerging market banks. Furthermore, a comparative analysis using data from …