IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2020-01-25.html
   My bibliography  Save this article

The Competitiveness in the Banking Industry in Palestine

Author

Listed:
  • Issam Ayyash

    (Palestine Technical University, Palestine,)

  • Yousef Abdel Latif Abdel Jawad

    (Al-Quds Open University, Palestine.)

Abstract

The study measures the degree of competition in the banking industry in Palestine for the period from 2006 to 2010. It begins by measuring Lerner index, and then estimates the determinants of market power by regressing Lerner index on returns of assets and lending preferences. It uses data on 18 working banks in Palestine; the data is secondary, time-series and cross-sectional obtained by the Association of Banks in Palestine. The study establishes the log-log model for estimation and tests the variables according to the Ordinary Least Square method. The study concludes that the banking industry in Palestine is controlled by a few players, the assets concentration ratio is about 75%. About 72% of the working banks can raise the price above the marginal cost, and then able to earn profits.

Suggested Citation

  • Issam Ayyash & Yousef Abdel Latif Abdel Jawad, 2020. "The Competitiveness in the Banking Industry in Palestine," International Journal of Economics and Financial Issues, Econjournals, vol. 10(1), pages 201-208.
    • Handle: RePEc:eco:journ1:2020-01-25
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/9008/pdf
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/9008/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. De Jonghe, Olivier & Vennet, Rudi Vander, 2008. "Competition versus efficiency: What drives franchise values in European banking?," Journal of Banking & Finance, Elsevier, vol. 32(9), pages 1820-1835, September.
    2. J.A. Bikker & L. Spierdijk & P. Finnie, 2007. "The Impact of Market Structure, Contestability and Institutional Environment on Banking Competition," Working Papers 07-29, Utrecht School of Economics.
    3. Beck, Thorsten, 2008. "Bank competition and financial stability : friends or foes ?," Policy Research Working Paper Series 4656, The World Bank.
    4. Pohl, Birte, 2011. "Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector," Proceedings of the German Development Economics Conference, Berlin 2011 66, Verein für Socialpolitik, Research Committee Development Economics.
    5. Barth, James R. & Caprio, Gerard Jr. & Levine, Ross, 2004. "Bank regulation and supervision: what works best?," Journal of Financial Intermediation, Elsevier, vol. 13(2), pages 205-248, April.
    6. Petrou, Andreas, 2007. "Multinational banks from developing versus developed countries: Competing in the same arena?," Journal of International Management, Elsevier, vol. 13(3), pages 376-397, September.
    7. Jacob A. Bikker & Laura Spierdijk & Paul Finnie, 2006. "The Impact of Bank Size on Market Power," DNB Working Papers 120, Netherlands Central Bank, Research Department.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. David VanHoose, 2013. "Implications of Shifting Retail Market Shares for Loan Monitoring in a Dominant-Bank Model," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(3), pages 291-316, July.
    2. Mamonov, Mikhail, 2012. "The impact of market power of Russian banks on their credit risk tolerance: A panel study," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 28(4), pages 85-112.
    3. Agoraki, Maria-Eleni K. & Delis, Manthos D. & Pasiouras, Fotios, 2011. "Regulations, competition and bank risk-taking in transition countries," Journal of Financial Stability, Elsevier, vol. 7(1), pages 38-48, January.
    4. Hsing-Chin Hsiao & Mei-Hwa Lin, 2013. "Taiwan second financial restructuring and commercial bank productivity growth," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 12(4), pages 327-350, October.
    5. Brei, Michael & Jacolin, Luc & Noah, Alphonse, 2020. "Credit risk and bank competition in Sub-Saharan Africa," Emerging Markets Review, Elsevier, vol. 44(C).
    6. Abedifar, Pejman & Molyneux, Philip & Tarazi, Amine, 2018. "Non-interest income and bank lending," Journal of Banking & Finance, Elsevier, vol. 87(C), pages 411-426.
    7. Mr. Lev Ratnovski, 2013. "Competition Policy for Modern Banks," IMF Working Papers 2013/126, International Monetary Fund.
    8. Pasiouras, Fotios & Tanna, Sailesh & Zopounidis, Constantin, 2009. "The impact of banking regulations on banks' cost and profit efficiency: Cross-country evidence," International Review of Financial Analysis, Elsevier, vol. 18(5), pages 294-302, December.
    9. Olivier De Jonghe & Mustafa Disli & Koen Schoors, 2012. "Corporate Governance, Opaque Bank Activities, and Risk/Return Efficiency: Pre- and Post-Crisis Evidence from Turkey," Journal of Financial Services Research, Springer;Western Finance Association, vol. 41(1), pages 51-80, April.
    10. Olszak, Małgorzata & Pipień, Mateusz & Kowalska, Iwona & Roszkowska, Sylwia, 2014. "What drives heterogeneity of loan loss provisions’ procyclicality in the EU?," MPRA Paper 56834, University Library of Munich, Germany.
    11. Gábor Pellényi & Tamás Borkó, 2009. "Bank Competition and Firm Growth in the Enlarged European Union," Working Paper / FINESS 5.1, DIW Berlin, German Institute for Economic Research.
    12. Noman, Abu Hanifa Md. & Gee, Chan Sok & Isa, Che Ruhana, 2018. "Does bank regulation matter on the relationship between competition and financial stability? Evidence from Southeast Asian countries," Pacific-Basin Finance Journal, Elsevier, vol. 48(C), pages 144-161.
    13. Huljak Ivan, 2015. "Market power and stability of CEE banks," Business Systems Research, Sciendo, vol. 6(2), pages 74-90, September.
    14. Jose Felix Izquierdo, 2017. "Modelos para los flujos de nuevo credito en España," Working Papers 17/09, BBVA Bank, Economic Research Department.
    15. Diana Zigraiova & Tomas Havranek, 2016. "Bank Competition And Financial Stability: Much Ado About Nothing?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(5), pages 944-981, December.
    16. Samangi Bandaranayake & Kuntal K. Das & Robert W. Reed, 2020. "Another Look At ‘Bank Competition And Financial Stability: Much Ado About Nothing’?," Journal of Economic Surveys, Wiley Blackwell, vol. 34(2), pages 344-371, April.
    17. Samantas, Ioannis, 2013. "Bank competition and financial (in)stability in Europe: A sensitivity analysis," MPRA Paper 51621, University Library of Munich, Germany.
    18. J.A. Bikker & L. Spierdijk, 2008. "How Banking Competition changed over Time," Working Papers 08-04, Utrecht School of Economics.
    19. Małgorzata Pawłowska, 2010. "Competition in the Polish Banking Sector," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 5-6, pages 91-119.
    20. Horst Gischer & Toni Richter, 2011. "'Global Player' im Bankenwesen - ökonomisch sinnvoll oder problembehaftet?," FEMM Working Papers 110012, Otto-von-Guericke University Magdeburg, Faculty of Economics and Management.

    More about this item

    Keywords

    Competition; Market Power; Lerner Index; Banking Industry;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2020-01-25. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.