Tests for Traditional Structure-Conduct-Performance Paradigm and the Efficient Market Hypothesis in the Ethiopian Banking Sector
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Date
2010-06
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A.A.U
Abstract
This paper attempts to distinguish between the market structure paradigm and the
efficiency paradigm using concentration indices and market share into the empirical
analysis. Using panel data for the period 2000-2009 pertaining to eight private
commercial banks, we find in significant positive relationship between concentration and
profitability. The result also does not suggest relation ship between efficiency and
profitability. Hence, the paper lends no credence to the impact of imperfections of market
conditions as a result of concentration and market share. Moreover, evidence to argue for
a more interventionist competition policy in the banking sector is less likely.
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Keywords
Structure; profitability; effici ency; banks; concentration ; panel, JEL classification