Competitive Conditions of the Tunisian Banking Industry: An Application of the Panzar-Rosse Model

This study employs the Panzar–Rosse H‐statistic to assess the competitive conditions of the Tunisian banking industry over the period 1999 to 2003. The results show that the banking market is in long‐run equilibrium and the Panzar–Rosse H‐statistic indicates that the Tunisian banking market is operating under conditions of monopoly. It seems therefore that the liberalization process and the reforms implemented since 1987 to the banking sector could not compensate, for the period under study, the existence of market power in this sector.