Banking Concentration and its Impact on Economic Performance in Jordan

Authors

Khalid Al-TanbourFollow
Talib WarradFollow

Abstract

This paper aims to investigate the impact of banking concentration on investment and economic growth. In Jordan. It utilizes annual sample covering the period between 1980 and 2018. The study examines the effectiveness of the Structure-Conduct-Performance (SCP) hypothesis and the other Efficient-Structure (ES) hypothesis for the case of Jordan. The Augmented Dickey-Fuller (ADF) and cointegration tests are used and the results indicate to the appropriateness of the following econometric techniques: Autoregressive Distributed Lag Bound test (ARDL), the generalized methods of moments (GMM). The estimation results indicated to negative relationship between concentration index and both investment and the rate of real economic growth. The study recommended that the Central Bank should continue to allow new banks to enter the banking market to reduce the impact of concentration as much as possible, and to achieve competition gains in the Jordanian banking sector

Recommended Citation

Al-Tanbour, Khalid and Warrad, Talib (2022) "Banking Concentration and its Impact on Economic Performance in Jordan," Jerash for Research and Studies Journal مجلة جرش للبحوث والدراسات: Vol. 23: Iss. 2, Article 45.
Available at: https://digitalcommons.aaru.edu.jo/jpu/vol23/iss2/45