Financial Sector Competition in West African Economic and Monetary Union
AbstractThis paper investigates the degree of competition in the WAEMU financial industry over the period 2002-2007 using firm-level data (591 year-firm observations). Market structure analysis, the Panzar-Rosse model and conjectural variation are applied to assess the level of competition. The results show that the prevailing market structure in the WAEMU financial industry is concentrated and financial intermediaries operate under imperfect competition. Although competition was fierce during the mid-2000s, the level of competition has remained limited. Moreover, apart from Benin and Mali, the structural and non-structural approaches are closely related, contrary to previous findings, which have some implications for the empirical studies. Finally, a common regulatory framework does not imply similar level of competition. The presence of non-legal barriers is the most plausible explanation of these large differences between WAEMU members.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 201214.
Date of creation: 2012
Date of revision:
Banking competition; Market structure; Panzar-Rosse model; Conjectural variation model; WAEMU;
Find related papers by JEL classification:
- O55 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Africa
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- D4 - Microeconomics - - Market Structure and Pricing
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