A framework for analyzing competition in the banking sector: an application to the case of Jordan

Asli Demirguc-Kunt and Maria Soledad Martinez Peria

No 5499, Policy Research Working Paper Series from The World Bank

Abstract: This paper proposes a framework to analyze competition in the banking sector using Jordan as an example. In particular, the paper pursues a multi-pronged approach to analyze competition including (i) an examination of the extent to which the market is contestable (that is, has low barriers to bank entry and exit), (b) an evaluation of the behavior of bank spreads, and (iii) an assessment of non-structural and direct measures of bank competition such as the H-statistic and the Lerner Index. This approach provides a more comprehensive framework to examine competition in the banking sector, compared with the commonly used alternative of looking only at bank concentration figures. In the case of Jordan, the analysis indicates that although concentration has declined, competition in the country is low and has decreased over time.

Keywords: Banks&Banking Reform; Emerging Markets; Access to Finance; Debt Markets; Markets and Market Access (search for similar items in EconPapers)
Date: 2010-12-01
New Economics Papers: this item is included in nep-ara, nep-ban, nep-com and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:5499

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