Bank Efficiency, Competition and Concentration in MENA Region Countries: A Granger Causality Approach

In this paper, we aim to explore the causal relationship among the bank efficiency, competition, and concentration in the banking systems of 15 countries in the MENA region (Jordan, UAE, Bahrain, Algeria, Saudi Arabia, Kuwait, Morocco, Turkey, Tunisia, Oman, Palestine, Qatar, Lebanon, Egypt, and Mauritania), by modeling econometric panel data over 2008–2018. Banking efficiency is measured by Data Envelopment Analysis (DEA), while the level of competition is measured by the Boone Indicator, and the level of concentration is measured by the HHI index. Granger causality is used to estimate the relationship among these variables. Results indicate the presence of a significant effect of banking efficiency on banking competition and banking concentration.