Market Structure and Competitive Conditions in the Arab GCC Banking System

Saeed Al-Muharrami, Kent Matthews and Yusuf Khabari

No E2006/8, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper investigates the market structure of Arab GCC banking industry during the years of 1993 to 2002 using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI) and evaluates the monopoly power of banks over the ten years period using the "H statistic" by Panzar and Rosse. The results show that Kuwait, Saudi Arabia and UAE have moderately concentrated markets and are moving to less concentrated positions. The measures of concentration also show that Qatar, Bahrain and Oman are highly concentrated markets. The Panzar-Rosse H-statistics suggest that banks in Kuwait, Saudi Arabia and the UAE operate under perfect competition,banks in Bahrain and Qatar operate under conditions of monopolistic competition,and we are unable to reject monopolistic competition for the banking market in Oman.

Keywords: GCC countries; Concentration; Market structure; Competition; Panzar-Rosse model; k-bank concentration ratio (CR k ) and Herfindahl-Hirschman Index (HHI) (search for similar items in EconPapers)
JEL-codes: D40 G21 L1 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2006-01
New Economics Papers: this item is included in nep-com, nep-cse, nep-cwa, nep-fin, nep-fmk and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (73)

Published in Journal of Banking and Finance , 30 , 2006, pp. 3487-3501.

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Related works:
Journal Article: Market structure and competitive conditions in the Arab GCC banking system (2006)
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