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Applied Financial Economics

Volume 19, Issue 18, 2009

Market power versus efficient-structure in Arab GCC banking

Market power versus efficient-structure in Arab GCC banking

DOI:
10.1080/09603100902845478
Saeed Al-Muharramia & Kent Matthewsb*

pages 1487-1496

Available online: 06 Oct 2009

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.

 

Details

  • Available online: 06 Oct 2009

Author affiliations

  • a Department of Commerce and Economics, Sultan Qaboos University, Muscat, Oman
  • b Cardiff Business School, Cardiff University, Colum Drive, Cardiff, CF10 3EU, UK

Librarians

Taylor & Francis Group