Table 1 show that there was a significant increase in H-statistic (0.15 for the period and after rose revolution) for
interest income (INTREV) just after rose revolution, implying that the industry became high competitive during this
period. From 2006 to up to this time, the bank industry in Georgia has weak competition. This contrasts with the
expectation that financial liberalization would significantly increase competition in the banking sector. However,
this result is consistent with expectations given the consolidation in the sector. The low and declining H-statistic may be explained by the fact that the five dominant bank's average share of interest income increased after rose revolution. Although the results imply that competition deteriorated following the rose revolution sub-period, the
hypothesis of perfect collusion was rejected at each stage, suggesting that the industry remained monopolistically
competitive over the period.