Market power versus efficient-structure in Arab GCC banking

Saeed Al-Muharrami, Kent Matthews

Research output: Contribution to journalArticle

29 Citations (Scopus)

Abstract

This article evaluates the performance of the Arab Gulf Cooperation Council (GCC) banking industry in the context of the Structure-Conduct-Performance (SCP) hypothesis in the period 1993 to 2002. This article uses panel estimation differentiating between bank fixed effects and country fixed effects. It examines the Relative-Market-Power (RMP) and the Efficient-Structure (ES) hypotheses differentiating between the two by employing a nonparametric measure of technical efficiency, and finds that the banking industry in the Arab GCC countries is best explained by the mainstream SCP hypothesis. The empirical results do not find any support for the Hicks' (1935) 'Quiet Life' (QL) version of the market power hypothesis.

Original languageEnglish
Pages (from-to)1487-1496
Number of pages10
JournalApplied Financial Economics
Volume19
Issue number18
DOIs
Publication statusPublished - Sep 2009

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Banking
Market power
Gulf Cooperation Council
Banking industry
Fixed effects
Technical efficiency
Panel estimation
Empirical results

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

Cite this

Market power versus efficient-structure in Arab GCC banking. / Al-Muharrami, Saeed; Matthews, Kent.

In: Applied Financial Economics, Vol. 19, No. 18, 09.2009, p. 1487-1496.

Research output: Contribution to journalArticle

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