Is the MENA banking sector competitive?

Article


Elfeituri, H. and Vergos, Konstantinos 2018. Is the MENA banking sector competitive? Journal of Banking Regulation. 20 (2), pp. 124-135.
AuthorsElfeituri, H. and Vergos, Konstantinos
Abstract

The purpose of this paper is to investigate the competitive conditions and revenue drivers of commercial banks in the MENA region in the context of Panzar–Rosse model. It is the first study of its kind that examines a large sample of MENA banks for an extensive period (1999–2012) during an era of political and economic unrest and transformation that includes the the global financial crisis (2007–2009). Panel data analysis using fixed effects was employed in order to examine whether the competitive conditions in MENA banks is explained by monopoly, monopolistic competition or perfect competition. Findings show that MENA banks operate under monopolistic competition, and bank-specific variables show a positive impact on revenue. These findings indicate that policymakers should relax capital adequacy requirements to guarantee the stability of the financial system. They also raise a concern that commercial banks in the MENA economies tend to concentrate on traditional lending activities, where their competitive position may be eroded in the long run by the decreasing state role of Islamic banks and by mergers that are not empirically justified for MENA banks during this period.

JournalJournal of Banking Regulation
Journal citation20 (2), pp. 124-135
ISSN1745-6452
Year2018
PublisherPalgrave Macmillan
Accepted author manuscript
Digital Object Identifier (DOI)doi:10.1057/s41261-018-0072-5
Web address (URL)https://doi.org/10.1057/s41261-018-0072-5
Publication dates
Online04 Jul 2018
Publication process dates
Deposited05 Jul 2018
Accepted24 May 2018
Accepted24 May 2018
Copyright informationThis is a post-peer-review, pre-copyedit version of an article published in Journal of Banking Regulation. The definitive publisher-authenticated version, Elfeituri, H. & Vergos, K. J Bank Regul (2018) ‘Is the MENA banking sector competitive?’, Journal of Banking Regulation, 20(2), pp. 124-135, is available online at: https://doi.org/10.1057/s41261-018-0072-5
LicenseAll rights reserved (under embargo)
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https://repository.uel.ac.uk/item/84780

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