أثر قوة السوق و هيكل الكفاءة على أداء البنوك التجارية : دراسة تطبيقية على البنوك التجارية المدرجة في بورصة عمان

Abstract EN

This study aimed at assessing, analyzing and comparing cost efficiency, standard profit efficiency and alternative efficiency benchmarks for the banks listed on Amman Stock Exchange (15 commercial banks), covering the period 1993 to 2004.

This was based on a modern method meant for assessing cost and profit (standard and alternative) frontier, through applying distribution free approach.

Moreover, econometric models were adopted to test study assumptions through using panel data by virtue unbalanced panels characteristics.

In this respect, pooled regression, fixed effects and random effects models were applied (more consistent ones were chosen).

However, this was made in such a way to test the effect of market power and efficiency structure on banks performance, and to recognize the nature of banking industry as concerns competition, efficiency and banks' performance behavior.

Although findings of assessing cost efficiency, standard profit efficiency and alternative efficiency revealed the presence of substantial deviation off the optimal frontier; besides the existence of significant difference in the estimated levels of efficiency across the bank, findings were in the competition’s interest, while they did not support the traditional structure-conduct-performance assumption in such a way that Jordanian commercial banking is far from non-competitive practices across the more focused banks, i.e.

the banks which enjoy higher levels of efficiency.

Anyhow, focusing is no random occurrence, by any chance, but is the result of banks efficiency.

This is besides the role of laws and legislations which contributed to reinforcing and raising the competition levels, whereas lowering the market power impact on the prices within the domain of Jordanian commercial banking industry.

Furthermore, profit efficiency captured the relationship between performance and market share in fairly stronger image, and provided general view on banks performance and level of efficiency therein.

Consequently, the more efficient the bank at the profit level is, the better it is at performance that would score a higher share in the deposit market.

Besides, it is the bank that realizes revenues greater than costs.

In this case, efficiency structure, in terms of standard profit efficiency, could be regarded as having realized the specifications of structure-profit relationship, which rated as the main determinant of bank performance, and the one that accounts, in a significant manner, for the behavior of bank performance within the domain of Jordanian commercial banking industry.