The Extent of Competition and Its Impact on Bank Efficiency: Case of the Tunisian Commercial Banks

Abstract

The increasing of banking competition has pushed worldwide banks to improve their resource allocations in order to become more competitive and efficient. The purpose of this article is to measure the level of banking competition and its impact on Tunisian banks. Our empirical investigation is based on a sample of ten Tunisian banks during the period from 1998 to 2013. Its purpose is to measure their competition by using the Herfindahl index and the concentration ratio as structural approach and the model Panzar and Rosse as non-structural approach. We found that Tunisian banks are in intense competitive situation. Similarly, we found that more concentration decreases, more the competition between banks increases.