Competition and Efficiency in Banking: Behavioral Evidence From Ghana

Mathisen, Johan; Buchs, Thierry

doi:10.5089/9781451860368.001

Cited by 28 publications

(5 citation statements)

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“…Mathisen and Buchs (2005) also apply it for the Ghanian financial system, Prasad and Ghosh (2005) do the same for the Indian Banking system, Bikker and Raaf (2002) for the the european banking sector, among many others. 11 Cetorelli (1999) has a short survey of the most important methodologies.…”

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confidence: 99%

Competition in the Brazilian loan market: an empirical analysis

Lucinda

2010

Estud. Econ.

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ResumoNeste artigo, o objetivo é rever os testes empíricos existentes para o grau de competição no setor bancário brasileiro, assim como propor algumas alternativas. Após a descrição do ambiente institucional do sistema bancário brasileiro, os testes sobre a competição, presentes na literatura, foram revisados, começando com o proposto por Panzar e Rosse (1987). A principal conclusão que pode ser extraída desta análise é que o mercado não aparenta estar em equilíbrio de longo prazo, indicando que o mercado não é regido por condições de colusão perfeita. O passo seguinte foi tentar uma nova metodolodia aplicada por Moreno, Martínez e Ruiz (2006) para o mercado bancário espanhol. Nesta metodologia, em que a hipótese de igualdade dos parâmetros de conduta entre empresas e ao longo do tempo é relaxada, os resultados indicam que, para algumas empresas e em alguns instantes do tempo, uma conduta coo-perativa está presente. Palavras-Chave competição bancária AbstractThe aim of this paper is to review some of the existing tests for competition in Brazilian banking, as well as to propose an alternative. After the description of the institutional setting of the Brazilian Banking system on this period, the competition tests on the literature were reviewed, beginning with the test proposed by Panzar and Rosse (1987). The market does not seem to be in long-run equilibrium, implying only the market does not seem to find itself in collusive outcome. The next step was to try a new methodology, applied by Moreno, Martínez and Ruiz (2006) for the Spanish banking market. On this methodology, in which the assumption of equality of conduct parameters between firms and time periods is relaxed, the results indicate that, for some firms and in some time periods, a cooperative conduct in fact is present.

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confidence: 99%

Competition in the Brazilian loan market: an empirical analysis

Lucinda

2010

Estud. Econ.

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“…Rold os (2004); Mathisen and Buchs (2005); Hauner and Peiris (2005); Yuan (2006); Yeyati and Micco (2007) and Semih Yildirim and Philippatos (2007). 13 Funds and total deposits are used interchangeably throughout this paper.…”

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confidence: 99%

“…12 12 To review these studies, refer to Burdisso, Catena and D'Amato (2001); Belaisch (2003); Gelos and Roldós (2004); Mathisen and Buchs (2005); Hauner and Peiris (2005); Yuan (2006); Yeyati and Micco (2007) and Semih Yildirim and Philippatos (2007). …”

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confidence: 99%

How competitive is the Syrian banking sector? Empirical evidence from ‘pre/post’ war Syria

Diwani

2022

Pacific Economic Review

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This paper investigates the degree of market power in the Syrian banking sector over the period 2005–2016 where research on competitive conditions does not exist. The degree of competitiveness is assessed based on the revenue elasticity to input prices approach and is related to a set of market indicators. To test whether the Syrian crisis has altered the competitive conditions over the years of the sample, I divide the full sample into two subsamples, namely the pre‐crisis years (2005–2012) and the crisis years (2013–2016). The results suggest that banks in Syria earn their interest and total revenue under conditions of monopoly. I find that the trend of market structure—characterized by a monopoly—in the pre‐crisis years continues over crisis years. My findings provide robust evidence that a collusive behaviour among banks is in operation in the banking sector of Syria. The difficult penetration into/exit from the market has led to the existence of a profit‐curb mechanism for the Syrian banks, hence, an upward shift in the marginal cost curve will be associated with a reduction in revenue as a result of the optimal condition for these banks which act as monopolists.

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“…However, Claessens and Laeven (2003) include Kenya, Nigeria, and South Africa in their cross-country study. Later on, Buchs and Mathisen (2005) apply PR model for Ghana and find evidence for a noncompetitive market structure in the Ghanaian banking system, which may be hampering financial intermediation. Their study further argues that the structure as well as the other market characteristics, constitute an indirect barrier to entry, thereby shielding the large profits in the Ghanaian banking system.…”

Section: Empirical Background and The Conceptualizationmentioning

confidence: 99%

“…The PR model has been widely applied to analyze the nature of competition in more developed banking systems, however more recently outreached its application in banking systems of under developed economies (E.g. Buchs and Mathisen (2005); Claessens and Leaven (2003). Being 'non-structural' is the fundamental explanation behind utilizing this approach.…”

Section: Empirical Background and The Conceptualizationmentioning

confidence: 99%

Examining the competitiveness of banking sector in Sri Lanka

Liyanagamage

2021

IJRBS

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The banking sector in Sri Lanka has been portrayed by significant changes in the past few decades. It is widely perceived that competition in the Sri Lankan banking sector has improved since the introduction of the financial sector reforms in the 1990s. By applying Panzar-Rosse (PR) approach to test the degree of competitiveness, this paper assesses the validity of this claim in the context of the Sri Lankan banking sector during 1996-2018. The sample covers a broader set of bank-level panel data of the whole commercial banking sector which comprised of 25 licensed commercial banks. The EGLS procedure applied in this study revealed that during the stated period, the Sri Lankan banking sector had been moderately competitive. Further analysis also disclosed that there is no significant difference between the state-owned banks and private banks regarding their degree of competitiveness, as well as their temporal dynamics. Another striking observation revealed in this analysis is the lower level of competitiveness among foreign banks compared to the competitiveness of local banks. The Competitiveness of the Sri Lankan banking sector however is characterized by non-price competition, as on many occasions the interest rate depends on government policies. Hence, this study provides new insight into the nature of financial sector competitiveness in underdeveloped countries. The outcome of the research implies the necessity of attempts of all banks towards re-aligning their strategies to attract and retain customers. This would be the major challenge that banks face in accomplishing a higher level of competition in the banking industry in the future.

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Competition and Efficiency in Banking: Behavioral Evidence From Ghana

Cited by 28 publications

References 14 publications

Competition in the Brazilian loan market: an empirical analysis

Competition in the Brazilian loan market: an empirical analysis

How competitive is the Syrian banking sector? Empirical evidence from ‘pre/post’ war Syria

Examining the competitiveness of banking sector in Sri Lanka

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