RT Journal Article
T1 Market Structure and Technical Efficiency of Banks in the MENA Region
A1 Maside Sanfiz, José Manuel
A1 Iglesias Casal, Ana
A1 Mazahreh, Qusay Ayman Sulaiman
A1 López Andión, María del Carmen
K1 MENA countries
K1 Bank competition
K1 Market power
K1 Market concentration
K1 Bank efficiency
AB The banking sector is the main source of finance for firms in the Middle East and North Africa (MENA) region and has certain peculiarities, for example, the significant presence of Islamic banking and low levels of competition. This study examines the influence of market structure (concentration and competition) on efficiency in a sample of 239 banks operating in the MENA region over a period from 2011 to 2020. Banking efficiency scores have been obtained with the Data Envelopment Analysis (DEA), the level of concentration has been measured by the Herfindahl-Harshman index and competition has been proxied by the bank-level Lerner index. We have assessed the relationship between competition and concentration on efficiency using Simar and Wilson’s two-stage approach. The robustness has been tested using the Generalized Method of Moments (GMM) system to mitigate potential endogeneity. The results indicate that concentration influences efficiency positively and market power negatively; in terms of the interaction between both variables, bank efficiency increases, in line with the bank specificity hypothesis (BSH). Although previous papers have used various indicators of concentration and competition, to our knowledge, this study is the first to examine their combined effects on bank efficiency in the MENA region. In addition, bank-specific characteristics (size, profitability, and capitalization) and bank type (Islamic, domestic) positively affect efficiency, as do indicators of financial inclusion, institutional framework, and financial development. These aspects allow us to extract relevant results that offer a number of practical implications for managers and policy makers to improve bank efficiency.
PB SAGE Publications
SN 2158-2440
YR 2025
FD 2025
LK https://hdl.handle.net/10347/42865
UL https://hdl.handle.net/10347/42865
LA eng
NO Maside-Sanfiz, J. M., Iglesias-Casal, A., Mazahreh, Q. A. S., & López-Andión, C. (2025). Market Structure and Technical Efficiency of Banks in the MENA Region. SAGE Open, 15(2). https://doi.org/10.1177/21582440251324792 (Original work published 2025)
NO The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The authors acknowledge financial support provided by the Xunta de Galicia through research project Consolidación 2024 GRC GI-1866 Valoración Financiera Aplicada-VALFINAP (ED431C 2024/08).
DS Minerva
RD 3 may 2026