Testing for competition in the South African banking sector

Posted by D. Daniel Sokol

Witness Simbanegvi (National Treasury, Republic of South Africa), Josh Greenberg (Competition Commission South Africa) and Tendai Gwatidzo (Witts University) are Testing for competition in the South African banking sector

ABSTRACT: This paper employs the Panzar and Rosse (1987) and the Bresnahan models to determine the level of competition in the South African banking sector. This level of competition was tested during the period 1998 to 2008 for the Panzar and Rosse approach and from 1992 to 2008 for the Bresnahan model. We find evidence of monopolistic competition in the South African banking sector. Our findings are consistent with those of Bikker et al (2012) for South Africa.