Does Bank Sector Competition Improve amid Liberalization?
Evidence from Ghana

Frank Prah
Bank of Ghana


To assess changes in competition over time, four different measures were applied on bank-level quarterly data on commercial banks in Ghana from 2000q3 to 2011q4. The Concentration Ratios and the Hirfindahl-Hirshman Index show that market dominance reduced during the period. However, the quarterly Price Cost Margins and the yearly Panzar-Rosse model estimates indicate that competitive conduct was volatile. Finally, the recursive estimates of the Panzar-Rosse model indicate that competition intensity reduced after peaking in 2003 but rebounded from 2009. The study concludes that reduction in market barriers does not necessarily lead to similar improvements in competitive conduct among Ghanaian banks.