An Analysis of the Price-Concentration Relationship in the Botswana Commercial Banking Industry

Charles C. Okeahalam
Additional contact information
Charles C. Okeahalam: University of Botswana

Journal of African Development, 1998, vol. 3, issue 1, 65-84

Abstract: There are two different schools of thought on the relationship between pricing and measures of market structure such as concentration and market share in the banking industry. The structure-conduct-performance (market power) school suggests that concentration is empirically evident via the setting of prices which are less favorable to consumers (higher-borrowing rates and lower-deposit rates). Here conduct is structure driven and leads to further increases in welfare reducing concentration. The other school of thought - efficient-structure-suggests that due to X-efficiency some firms derive their higher profits by keeping costs lower via better management or production technologies. The other idea of the efficient-structure school is that though firms may have similar management and technology, some firms are capable of producing at more efficient scales than others and therefore also have lower unit costs and higher unit profits. This papers adds to the debate by using data on the banking industry in Botswana to examine the above theories. Preliminary findings support the structure-conduct hypothesis.

Date: 1998
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.afeawpapers.org/RePEc/afe/afe-journl/wp ... 07/JAD_vol3_Chp3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:afe:journl:v:3:y:1998:i:1:p:65-84

Access Statistics for this article

More articles in Journal of African Development from African Finance and Economic Association (AFEA) Contact information at EDIRC.
Bibliographic data for series maintained by Christian Nsiah ().