[01] Arjan Tushaj, Department of Economics, Faculty of Business Administration and Economics, University of Tirana, Tirana, Albania. [02] Valentina Sinaj, Department of Informatics, Math and Statistics, Faculty of Business Administration and Economics, University of Tirana, Tirana, Albania.

Structural changes of Albanian banking sector over the years have reflected their effects on the banking concentration and behaviour. The article examines the banking competition using Panzar–Rosse model to panel datasets of Albanian banking sector during 2005-2011. Applied results on the banking competition using H statistic of PR confirmed the monopolistic competition structure. The comparative statics demonstrated that the Albanian banking sector was lightly comparable with the EU countries and more competitive than several Balkan countries. H statistic confirmed the frail linkage among the banking competition and concentration meanwhile it proved the occurrence of contestability in the banking market. This article highlighted no robust support linking to the assessment of banking competition through the traditional approaches.

Banking Competition, Market Structure, Panzar-Rosse Model

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