Competition and Efficiency in Banking: Behavioral Evidence from Ghana

Bank Efficiency and Competition in Low-Income Countries: The Case of Uganda

“…Note also that the market structure of South Africa is believed to be significantly more competitive, including by international standards. Buchs and Mathisen (2005), and Claessens and Laeven (2003) The revenue functions highlight a number of characteristics of the Ugandan banking system:…”

“…As in other sectors, the degree of competition in the banking system should be measured with respect to the actual behavior of (marginal) bank conduct. To date, however, few studies have applied this approach to LICs to our knowledge, with the exception of Buchs and Mathisen (2005) and Claessens and Leaven (2003). These considerations suggest some advantages of using a more structural approach to assess the degree of competition in the banking sector in Uganda.…”

“…The PR model has been extensively used to analyze the nature of competition in mature banking systems, but only more recently in emerging markets' banking systems, 7 with only two studies to our knowledge on SSA: Buchs and Mathisen (2005) for Ghana, and Claessens and Leaven (2003), who include Kenya, Nigeria, and South Africa in their cross-country study.…”

“…This model is similar to models used previously in the literature to estimate H-statistics for banking industries, but following Gelos and Roldos (2002), we also estimate reduced-form revenue equations with unscaled total revenue because the specification above could provide a price equation (see Buchs and Mathisen, 2005).…”

“… See Gelos and Roldos (2002), andBuchs and Mathisen (2005) for weaknesses of the equilibrium test. 7 SeeGelos and Roldos (2002) (Central Europe and Latin America),Belaisch (2003) (Brazil),Levi Yeyati and Micco (2003) (Latin America), andClaessens and Leaven (2003) (cross-country).…”