Tests For Traditional Structure-conduct-performance Paradigm And The Efficient Market Hypothesis In The Ethiopian Banking Sector

This paper attempts to distinguish between the market structure paradigm and thernefficiency paradigm using concentration indices and market share into the empiricalrnanalysis. Using panel data for the period 2000-2009 pertaining to eight privaterncommercial banks, we find insignificant positive relationship between concentration andrnprofitability. The result also does not suggest relationship between efficiency andrnprofitability. Hence, the paper lends no credence to the impact of imperfections of marketrnconditions as a result of concentration and market share. Moreover, evidence to argue forrna more interventionist competition policy in the banking sector is less likely.rnKey words: Structure; profitability; efficiency; banks; concentration; panel econometrics.

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