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Impact of Financial Liberalization on Concentration and Competition in the Ghanaian Banking System: A Panzar-Rosse Analysis

Adu, Abraham; Bhattarai, Keshab

Authors

Abraham Adu



Contributors

Abstract

This paper empirically investigated the evolution of market concentration in Ghana. It tests market competitiveness in banking systems post financial sector reforms. Using unbalanced panel data of 24 banks in the period 2003-2012, a period characterized with deregulation, liberalization and consolidation of the banking sector in Ghana. Market concentration in the Ghanaian banking sector is measured by the Hirschman-Herfindahl indices as well as CR3 and CR5 with this panel data. Both CR3 and CR5 had a decreasing trend indicating falling market concentration ratios and increasing rate of competition in the Ghanaian banking industry. The degree of competition based on the revenue elasticity to input approach under Panzar-Rosse framework indicates monopolistic competition in both interest based market and total revenue markets relative that in the non-interest based market in the Ghanaian banking industry.

Citation

Adu, A., & Bhattarai, K. (2022). Impact of Financial Liberalization on Concentration and Competition in the Ghanaian Banking System: A Panzar-Rosse Analysis. Journal of Development Economics and Finance, 3(2), 253-273. https://doi.org/10.47509/JDEF.2022.v03i02.01

Journal Article Type Article
Acceptance Date Jun 29, 2022
Online Publication Date Nov 1, 2022
Publication Date Nov 1, 2022
Deposit Date Nov 9, 2022
Publicly Available Date Mar 29, 2024
Journal Journal of Development Economics and Finance
Publisher ARF India
Peer Reviewed Peer Reviewed
Volume 3
Issue 2
Pages 253-273
DOI https://doi.org/10.47509/JDEF.2022.v03i02.01
Keywords Ghana; Financial Sector Reforms; Banking; Concentration; Competition
Public URL https://hull-repository.worktribe.com/output/4117087
Publisher URL https://www.arfjournals.com/jdef/issue/183

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