Title: Competition in MENA countries banking markets

Authors: Bana Abuzayed; Nedal Al-Fayoumi; Hisham Gharaibeh

Addresses: Talal Abu-Ghazaleh Graduate School of Business, The German Jordanian University, Amman, Jordan. ' Faculty of Business, The University of Jordan, Amman, Jordan. ' Talal Abu-Ghazaleh Graduate School of Business, Amman, Jordan

Abstract: This study examines the banking power in a number of highly concentrated banking industries. In particular, this paper tests the competitive conditions in the banking industries of six Middle Eastern and North African (MENA) countries for the period from 1998 to 2007. Using the new industrial organisation literature methodology, our results reveal that the banking market structure can be characterised as monopolistic competition. The result of this study is necessary for policy makers in MENA region. For them this is a signal to review their policy of interference and involvement in changes in the market structure of the banking markets and to be cautious of the process of consolidation and increasing concentration. Our results are rigorous under a variety of specification controlling for bank size, risk and a number of estimation techniques including static and dynamic data analysis (Fixed or Random effects and the Generalised Methods of Moment).

Keywords: bank competition; MENA countries; Middle East; North Africa; GMM; generalised methods of moment; concentration; Panzar and Rosse; banking industry; industrial organisation; banking market structure.

DOI: 10.1504/IJFSM.2012.046951

International Journal of Financial Services Management, 2012 Vol.5 No.3, pp.272 - 301

Published online: 20 May 2012 *

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