A framework for analyzing competition in the banking sector: An application to the case of Jordan (original) (raw)
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The Evolution of Bank Competition: Have Conditions Changed in the Jordanian Banking Sector?
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Banking Competition and Efficiency in Jordan: A Note
International Journal of Banking and Finance, 2013
The financial economics literature contains numerous research papers which examine issues that concern the banking industry. One of these issues is banking competition. Indeed, this issue is important because of its implications to financial stability and the growth of the borrowing firms. The purpose of this paper is to assess the competitive behavior of the Jordanian banking sector during the period ranging from 1999 to 2008 using the nonstructural test developed by Panzar and Rosse. In more specific terms, this paper examines the overall competitive condition during the period 1999-2008 and how it has evolved over time. Based on the empirical findings, it is expected that a number of policy recommendations may be provided. The objective of these recommendations is to enhance the regulation of the banking sector in Jordan and improve their performance.
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This paper aimed at assessing the levels of competition in the Jordanian banking sector, using the so called Panzar-Rosse model. The study used a sample of 13 Jordanian commercial banks listed on Amman Stock Exchange during the time period 2009-2015.Pooled data regression was used to measure the level of competition among Jordanian banking. The major findings indicated that the computed H statistic for the sample was 0.3111, indicating that the Jordanian banking sector is under monopolistic competitive nature, but still close to the monopoly market with high concentration and low competition among banks.
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Determinants of Bank Competition in Morocco and Evaluation of Structural Reforms
International Journal of Economics and Financial Issues, 2013
The empirical results of this paper indicate that the degree of competition in the banking system is determined by several macroeconomic aggregates that describe the relevance of the policies implemented in financial Morocco. Thus, the result shows that there is a positive relationship between the index of competition and concentration there by verifies our theoretical perception. On another note, economic growth is negatively correlated with the competition, which unfortunately indicates that when there are sustained economic growth banks does not behave concurrently and try to retain their market share stimulated by a high concentration sector. This is also dependent on conditions in the credit market, which indicates that when the demand is constant, banks tend to have fewer competing behaviors. In addition, the development of positive market impact of competition which is consistent with liberal theory. Thus, the use of financial market intensifies competition between banks to produce services being able to attract more customers to compensate for those who chose the stock market. Finally, in the implementation of monetary policy, the indicator of interbank interest rate has a positive impact on competition.
The Evolution of Competition of the Tunisian Banking Sector: An Empirical Analysis
Zagreb International Review of Economics and Business, 2013
This paper analyzes the evolution of competition in the Tunisian banking sector in the period 2000-2008, which is a period of deregulation, liberalization and consolidation of the sector. For this purpose, we use two indicators of the competition from the theory of the industrial organization (the Lerner index and the Panzar and Rosse's H-statistic). The empirical evidence does not permit us to reject the existence of monopolistic competition. The evolution of Lerner index over the period of study shows a low tendency to concentration. The movements of the mergers of the banking institutions seem to be slow, as a big effort of cleaning their balance sheets remains to be achieved before banks can merge.
The Competition and Market Structure in the Saudi Arabia Banking
The purpose of this paper is twofold: to investigate the market structure of Saudi Arabia banking industry; and to evaluate the monopoly power of banks during the years 1993-2006. Design/methodology/approach – The paper is examining the market structure using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) and it is evaluating the monopoly power of banks using the “H-statistic” by Panzar and Rosse.
2012
This paper analyzes the evolution of competition in the Tunisian banking sector in the period 2000 - 2008, which is a period of deregulation, liberalization and consolidation of the sector. For this purpose, we use two indicators of the competition from the theory of the industrial organization (the Lerner index and the Panzar and Rosse's H- statistic). The empirical evidence does not permit us to reject the existence of monopolistic competition. The evolution of Lerner index over the period of study shows a low tendency to concentration. The movements of the mergers of the banking institutions seem to be slow, as a big effort of cleaning their balance sheets remains to be achieved before banks can merge. The importance of the credit as a means of financing companies in most of the developing countries has led to wonder about the effects of the financial liberalization on the increase of the banking competition. In Tunisia, like in many other countries, the liberalization of fin...