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Competition and Efficiency in Banking; Behavioral Evidence from Ghana


  • Johan Mathisen
  • Thierry D. Buchs


This paper assesses the degree of bank competition and discusses efficiency with regard to banks' financial intermediation in Ghana. By applying panel data to variables derived from a theoretical model, we find evidence for a noncompetitive market structure in the Ghanaian banking system, which may be hampering financial intermediation. We argue that the structure, as well as the other market characteristics, constitutes an indirect barrier to entry thereby shielding the large profits in the Ghanaian banking system.

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  • Johan Mathisen & Thierry D. Buchs, 2005. "Competition and Efficiency in Banking; Behavioral Evidence from Ghana," IMF Working Papers 05/17, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/17

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    References listed on IDEAS

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    12. Paolo Coccorese, 2002. "Competition Among Dominant Firms in Concentrated Markets: Evidence from the Italian Banking Industry," CSEF Working Papers 89, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
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    15. Xavier Vives, 2001. "Competition in the Changing World of Banking," Oxford Review of Economic Policy, Oxford University Press, vol. 17(4), pages 535-547.
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    Cited by:

    1. Arto Kovanen, 2011. "Monetary Policy Transmission in Ghana; Does the Interest Rate Channel Work?," IMF Working Papers 11/275, International Monetary Fund.
    2. Mehdi Mili & Jean-Michel Sahut & Hatem Trimeche, 2014. "Determinants of the Capital Adequacy Ratio of a Foreign Bank’s Subsidiaries: The Role of the Interbank Market and Regulation of Multinational Banks," Working Papers 2014-366, Department of Research, Ipag Business School.
    3. James Heintz & Gerald Epstein, 2006. "Monetary Policy and Financial Sector Reform For Employment Creation and Poverty Reduction in Ghana," Working Papers wp113, Political Economy Research Institute, University of Massachusetts at Amherst.
    4. Aryeetey, Ernest & Kanbur, Ravi, 2006. "Ghana’s Economy at Half Century: An Overview of Stability, Growth and Poverty," Working Papers 127036, Cornell University, Department of Applied Economics and Management.
    5. Turk-Ariss, Rima, 2009. "Competitive behavior in Middle East and North Africa banking systems," The Quarterly Review of Economics and Finance, Elsevier, vol. 49(2), pages 693-710, May.
    6. Phil Molyneux & Hong Liu & John O.S. Wilson, 2010. "Measuring Competition and Stability: Recent Evidence for European Banking," Working Papers 10020, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    7. Gerald Epstein & James Heintz, 2006. "Monetary Policy and Financial Sector Reform for Employment Creation and Poverty Reduction in Ghana," Country Study 2, International Policy Centre for Inclusive Growth.
    8. BALTES Nicolae & RODEAN (Cozma) Maria-Daciana, 2015. "Study Regarding The Credit Institution S Capital Adequacy From The Point Of View Of Basel Iii Agreement," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 67(4), pages 8-18.
    9. 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.
    10. Jérôme Vacher & Samer Y. Saab, 2007. "Banking Sector Integration and Competition in CEMAC," IMF Working Papers 07/3, International Monetary Fund.
    11. Mai Anh NGO, 2015. "Exporting and Firm-Level Credit Constraints-Evidence from Ghana," Working Papers DP-2015-27, Economic Research Institute for ASEAN and East Asia (ERIA).
    12. Hong Liu & Philip Molyneux & Linh H Nguyen, 2011. "Competition and risk in the South East Asian commercial banking," Post-Print hal-00711456, HAL.
    13. Patrick Honohan & Thorsten Beck, 2007. "Making Finance Work for Africa," World Bank Publications, The World Bank, number 6626, June.
    14. Rezitis, Anthony N., 2010. "Evaluating the state of competition of the Greek banking industry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(1), pages 68-90, February.
    15. repec:eco:journ1:2017-05-47 is not listed on IDEAS
    16. International Monetary Fund, 2005. "Competition in Indian Banking," IMF Working Papers 05/141, International Monetary Fund.
    17. David Hauner & Shanaka J Peiris, 2005. "Bank Efficiency and Competition in Low-Income Countries; The Case of Uganda," IMF Working Papers 05/240, International Monetary Fund.
    18. Kouki, Imen & Al-Nasser, Amjad, 2017. "The implication of banking competition: Evidence from African countries," Research in International Business and Finance, Elsevier, vol. 39(PB), pages 878-895.
    19. repec:eee:riibaf:v:41:y:2017:i:c:p:412-422 is not listed on IDEAS

    More about this item


    Competition; Ghana; banking competition; banking; banking sector; banking system; banking industry; Market Structure and Pricing: Oligopoly and Other Forms of Market Imperfection;

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