• Daniel Assefa Mekonnen
• Dr. P.Viswanadham

Abstract The banking sector competition considered in the scientific community as important research areas and many of them related it to performance to explain market competitiveness. This paper has made attempt to assess the degree of competition and the long term equilibrium in Ethiopian commercial banking sector. The study use a mixed structural and not structural market approach to measure the degree of competitiveness based on quantitative studies is adopted to form a causal link among different extraneous and firm specific factors variables with bank performance. The paper employed a secondary data from audited financial account of 16 out of 18 commercial banks collected from each respective banks and the NBE from the period 2010 to 2016. The paper is examining the market using the most frequently applied measures of concentration k-bank concentration ratio (CRk) and Herfindahl-Hirschman Index (HHI). The widely accepted Panzar and Rosse (1987) model and its H-statistic are also used as a non-structural method to assess the degree of competition where a panel data regression model was employed to investigate the relationship between Market share, bank size and other factors on profit and price performances analyzed using generalized least square (GLS) method on STATA Software. The empirical results using CRk and HHI show that Ethiopian banking is a highly concentrated market and show stagnated trends during the study period. The Panzar-Rosse “H-statistic” suggests that banks in Ethiopian operate under monopoly or monopolistic competition depending on the market segment.

Herfindahl-Hirschman Index; Panzar-Rossel; H-statiistic; Banking; Market segment; monopolistic competition

"Market structure and competition in the Ethiopia banking industry: Empirical Analysis Using Panzar-Rosse Model", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 11, page no.303-319, November-2018, Available :http://www.jetir.org/papers/JETIR1811445.pdf

"Market structure and competition in the Ethiopia banking industry: Empirical Analysis Using Panzar-Rosse Model", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 11, page no. pp303-319, November-2018, Available at : http://www.jetir.org/papers/JETIR1811445.pdf