Efficiency, market concentration and bank performance during the COVID-19 outbreak: Evidence from the MENA region

Miroslav Mateev, Muhammad Usman Tariq and Ahmad Sahyouni

PLOS ONE, 2023, vol. 18, issue 5, 1-34

Abstract: This study aims to contribute to the existing literature that explores the impact of market concentration on bank efficiency in emerging economies. Using a sample of 225 banks in 18 countries in the Middle East and North Africa (MENA) region over the period 2006–2020, we empirically investigate the significance of this relationship. Since the evidence of concentration effect on efficiency during the COVID-19 outbreak is ambiguous, we test the hypothesis that the efficiency is positively affected by the level of banking market concentration in the MENA region. We adopt fixed effect model specifications and test the robustness of our results with the two-step Generalized Method of Moments (GMM) estimation technique. Our analysis finds a strong positive association between market concentration and bank efficiency. The analysis of different types of banking systems that co-existing in the MENA region (Islamic and conventional) indicates the market concentration effect is more pronounced when the banking institution is Islamic and during the COVID-19 outbreak. Moreover, the better economic performance of Islamic banks during the initial stage of pandemic further increases their efficiency. Our analysis indicated that the impact of market competitive conditions on bank efficiency varies significantly across banks with different ownership structures and is more pronounced for government-owned banks. The results are robust using different model specifications and alternative estimation techniques.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0285403 (text/html)
https://journals.plos.org/plosone/article/file?id= ... 85403&type=printable (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:plo:pone00:0285403

DOI: 10.1371/journal.pone.0285403

Access Statistics for this article

More articles in PLOS ONE from Public Library of Science
Bibliographic data for series maintained by plosone ().