TY - JOUR
T1 - Market structure and competitive conditions in the Arab GCC banking system
AU - Al-Muharrami, Saeed
AU - Matthews, Kent
AU - Khabari, Yusuf
PY - 2006/12
Y1 - 2006/12
N2 - This paper investigates the market structure of Arab GCC banking industry during the years of 1993-2002 using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) and evaluates the monopoly power of banks over the ten years period using the 'H-statistic' by Panzar and Rosse. The results show that Kuwait, Saudi Arabia and UAE have moderately concentrated markets and are moving to less concentrated positions. The measures of concentration also show that Qatar, Bahrain and Oman are highly concentrated markets. The Panzar-Rosse H-statistics suggest that banks in Kuwait, Saudi Arabia and the UAE operate under perfect competition; banks in Bahrain and Qatar operate under conditions of monopolistic competition; and we are unable to reject monopolistic competition for the banking market in Oman.
AB - This paper investigates the market structure of Arab GCC banking industry during the years of 1993-2002 using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) and evaluates the monopoly power of banks over the ten years period using the 'H-statistic' by Panzar and Rosse. The results show that Kuwait, Saudi Arabia and UAE have moderately concentrated markets and are moving to less concentrated positions. The measures of concentration also show that Qatar, Bahrain and Oman are highly concentrated markets. The Panzar-Rosse H-statistics suggest that banks in Kuwait, Saudi Arabia and the UAE operate under perfect competition; banks in Bahrain and Qatar operate under conditions of monopolistic competition; and we are unable to reject monopolistic competition for the banking market in Oman.
KW - Competition
KW - Concentration
KW - GCC countries
KW - Market structure
KW - Panzar-Rosse model
KW - k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI)
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U2 - 10.1016/j.jbankfin.2006.01.006
DO - 10.1016/j.jbankfin.2006.01.006
M3 - Article
AN - SCOPUS:33750865438
SN - 0378-4266
VL - 30
SP - 3487
EP - 3501
JO - Journal of Banking and Finance
JF - Journal of Banking and Finance
IS - 12
ER -