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The competition and market structure in the Saudi Arabia banking

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  • Saeed Al‐Muharrami

Abstract

Purpose - 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 concentrationk‐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. Findings - The results show that Saudi Arabia has a moderately concentrated market and is moving to a less concentrated position. Both the concentration indices indicate that the country is moving toward a better position in terms of the market concentration. The Panzar and Rosse “H‐statistic” suggests that banks in Saudi Arabia operate under monopolistic competition. Research limitations/implications - These findings may be a temporary effect, evident during the sampled period only. To draw firmer conclusions a longer sample period is needed. Originality/value - Studies of banking market structure in the developed economies' banking are commonplace, however, very few studies are conducted for Saudi Arabia's banking industry.

Suggested Citation

  • Saeed Al‐Muharrami, 2009. "The competition and market structure in the Saudi Arabia banking," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 36(5), pages 446-460, September.
    • Handle: RePEc:eme:jespps:v:36:y:2009:i:5:p:446-460
    DOI: 10.1108/01443580910992375
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    Citations

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    Cited by:

    1. Durán-Vanegas, Juan David, 2016. "The Determinants of Bank Interest Rate Margins in the Colombian Housing Credit Market," MPRA Paper 86376, University Library of Munich, Germany.
    2. Anwar Hossain Repon & K.M Zahidul Islam, 2016. "Competition and Concentration in Bangladeshi Banking Sector: An Application of Panzar-Rosse Model," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 5(1), pages 14-29, January.
    3. Valenciano, Jaime de Pablo & Battistuzzi, Miguel Angel Giacinti & Azcaráte, Tomás García, 2015. ""Banana War" And World Trade Changes," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(2), pages 1-12, April.
    4. Valenciano, Jaime de Pablo & Giacinti Battistuzzi, Miguel Angel & Garcia Azcaráte, Tomás, 2015. "Chile-EU Trade Agreement: What Can We Learn from Trade Statistics?," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 6(1), pages 1-12, January.
    5. Iulia Iuga, 2013. "Analysis Of The Banking System'S Concentration Degree In Eu Countries," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-16.
    6. Memić Deni, 2015. "Banking Competition and Efficiency: Empirical Analysis on the Bosnia and Herzegovina Using Panzar-Rosse Model," Business Systems Research, Sciendo, vol. 6(1), pages 72-92, March.
    7. Ronald Kumar & Arvind Patel, 2014. "Exploring competitiveness in banking sector of a small island economy: a study of Fiji," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(6), pages 3169-3183, November.
    8. Mohammad Abdelkarim Almumani, 2013. "The Relative Efficiency of Saudi Banks: Data Envelopment Analysis Models," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 152-161, July.
    9. Iveta Repková & Daniel Stavárek, 2014. "Concentration and Competition in the Banking Sector of Turkey," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 16(36), pages 625-625, May.

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