A framework for analyzing competition in the banking sector : an application to the case of Jordan
AbstractThis paper proposes a framework to analyze competition in the banking sector using Jordan as an example. In particular, the paper pursues a multi-pronged approach to analyze competition including (i) an examination of the extent to which the market is contestable (that is, has low barriers to bank entry and exit), (b) an evaluation of the behavior of bank spreads, and (iii) an assessment of non-structural and direct measures of bank competition such as the H-statistic and the Lerner Index. This approach provides a more comprehensive framework to examine competition in the banking sector, compared with the commonly used alternative of looking only at bank concentration figures. In the case of Jordan, the analysis indicates that although concentration has declined, competition in the country is low and has decreased over time.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5499.
Date of creation: 01 Dec 2010
Date of revision:
Banks&Banking Reform; Emerging Markets; Access to Finance; Debt Markets; Markets and Market Access;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-16 (All new papers)
- NEP-ARA-2011-01-16 (Arab World)
- NEP-BAN-2011-01-16 (Banking)
- NEP-COM-2011-01-16 (Industrial Competition)
- NEP-REG-2011-01-16 (Regulation)
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