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Arab Journal of Administration المجلة العربية للإدارة

Abstract

This article investigates the relationship between market structure and profitability of commercial banks in Jordan using time series data between 2000 and 2008. While the market structure is measured by concentration ratio, the profitability measured by rate of return on assets (ROA), rate of return on capital (ROC), and rate of return on equity (ROE). The sample includes 13 commercial banks. Based on the pooled regression model, the results showed a significant relationship between ROA, ROC, ROE and concentration ratio, In addition, ratio of loans to assets of commercial banks (LTOAST), ratio of demand deposits to total deposits of commercial banks (DDTDEP) were the most important factor that affected the Jordanian commercial banks profitability during the study period. This study recommends that Jordanian banks should emphasise on the following issues: Mergers and Acquisitions, Total Quality Management and Economies of Scale

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