Market Structure and Competitive Conditions in the Arab GCC Banking System
AbstractThis paper investigates the market structure of Arab GCC banking industry during the years of 1993 to 2002 using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) and evaluates the monopoly power of banks over the ten years period using the "H statistic" by Panzar and Rosse. The results show that Kuwait, Saudi Arabia and UAE have moderately concentrated markets and are moving to less concentrated positions. The measures of concentration also show that Qatar, Bahrain and Oman are highly concentrated markets. The Panzar-Rosse H-statistics suggest that banks in Kuwait, Saudi Arabia and the UAE operate under perfect competition; banks in Bahrain and Qatar operate under conditions of monopolistic competition; and we are unable to reject monopolistic competition for the banking market in Oman.
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Bibliographic InfoPaper provided by Cardiff University, Cardiff Business School, Economics Section in its series Cardiff Economics Working Papers with number E2006/8.
Length: 25 pages
Date of creation: Jan 2006
Date of revision:
Publication status: Published in Journal of Banking and Finance , 30 , 2006, pp. 3487-3501.
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More information through EDIRC
GCC countries; Concentration; Market structure; Competition; Panzar-Rosse model; k-bank concentration ratio (CR k) and Herfindahl-Hirschman Index (HHI);
Other versions of this item:
- Al-Muharrami, Saeed & Matthews, Kent & Khabari, Yusuf, 2006. "Market structure and competitive conditions in the Arab GCC banking system," Journal of Banking & Finance, Elsevier, vol. 30(12), pages 3487-3501, December.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- D40 - Microeconomics - - Market Structure and Pricing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-29 (All new papers)
- NEP-COM-2006-01-29 (Industrial Competition)
- NEP-CSE-2006-01-29 (Economics of Strategic Management)
- NEP-CWA-2006-01-29 (Central & Western Asia)
- NEP-FIN-2006-01-29 (Finance)
- NEP-FMK-2006-01-29 (Financial Markets)
- NEP-MIC-2006-01-29 (Microeconomics)
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