The implication of banking competition: Evidence from African countries

Kouki, Imen; Al‐Nasser, Amjad D.

doi:10.1016/j.ribaf.2014.09.009

Cited by 46 publications

(45 citation statements)

References 53 publications

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“…We have also found results that are consistent with studies in the extant literature as per the behaviour of bank level competition in a number of SSA countries in which similar studies have been carried out. Kouki and Al-Nasser (2014) found an average market power index of within 58% and 74% within the period 2005-2010. Studies by Aboagye et al (2008), Amidu (2013) and Ariss (2010) found a varying degree of market power in a number of countries that were studied.…”

Section: Econometric Analysismentioning

confidence: 94%

“…Without loss of generality, Kouki and Al-Nasser (2014) conducted a study on the implication of competition in 31 African countries, used Lerner index to compute their competition variable and found index waving between 58% in Sudan and 74% in Mauritania with an overall average of 62.21% between 2005 and 2010. Given that his study capturing Africa as a continent did not take cognisance of the peculiarity of the SSA region, this constitutes the gap that this study proposes to fill by measuring the competitive condition of 37 SSA countries' commercial banking sectors for the period 2006 to 2015 using the Lerner index that is capable of measuring individual bank level competition in the short run and on year-on-year basis.…”

Section: Literature Reviewmentioning

confidence: 99%

“…This study adopts the Lerner index because among its contemporaries, it is one of the most efficient competition measures following the outcome of the correlation of all indicators by Liu et al (2013). In addition, the index allows for short term estimation and so can be used to compute competition of the banking market at any point in time, (Agoraki et al, 2011;Amidu, 2013;Ariss, 2010;Berger et al, 2009;Fu et al, 2014;Kouki and Al-Nasser, 2014). Finally, it is theoretically sound because it helps to locate the degree of competition between perfect competition and monopoly (Berger et al, 2009;Rojas, 2011).…”

Section: Model Specificationmentioning

confidence: 99%

“…The translog cost function, used generally in finance (Berger et al, 2009;Kouki and Al-Nasser, 2014) is an expression of a specific production model which for this study is assumed to be specified as the translog production function 4 . The name translog stands for transcendental logarithmic, in other words, translog cost function is a second-order Taylor series expansion of banks cost in natural logarithm.…”

Section: Model Specificationmentioning

confidence: 99%

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Competitive Condition of Sub-Saharan Africa Commercial Banks

Akande

Kwenda

2017

Studia Universitatis Babes-Bolyai Oeconomica

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Abstract. This study assesses the competitive environment and the determinants of the Sub-Saharan Africa commercial banking sectors. We used the Lerner index that is generally acknowledged as the best at estimating the bank level competition and the Generalised Method of Moments (GMM) to study 440 commercial banks for the period 2006 to 2015. We found a monopolistic competitive banking market. We also observed that competition is driven by the level of bank capital including some bank specific variables. Hence, we concluded that the banking market of the SSA region is contestable and competitive. As such, we recommend, among other things, that policy makers should device measures to ensure an ongoing competitive banking environment while stimulating other economic variables to complement this feat. JEL classification: G21, L10

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Section: Econometric Analysismentioning

confidence: 94%

Section: Literature Reviewmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

Section: Model Specificationmentioning

confidence: 99%

See 2 more Smart Citations

Competitive Condition of Sub-Saharan Africa Commercial Banks

Akande

Kwenda

2017

Studia Universitatis Babes-Bolyai Oeconomica

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“…The financial and banking systems in SSA countries remain underdeveloped and laced with inefficiencies. Banking competition brings about a stable and an efficient banking sector where there is access to finance, low charges and moderate interest rates spread (Ariss, 2010;Chirwa, 2003;Freixas & Rochet et al, 2008;Kouki & Al-Nasser, 2014;Mugume, 2008). However, service charges and lending rates are extremely high with meagre deposit interest rates in SSA banking sectors (Mlachila, Park, & Yabara, 2013).…”

Section: Public Interest Statementmentioning

confidence: 99%

Do competition, regulation and stability matter for eﬃciency in Sub-Saharan African banking sectors?

Akande

2018

Cogent Economics & Finance

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The excessive cost of financial intermediation in the Sub-Saharan African banking sectors motivates the investigation of whether competition, regulation and stability matter for efficiency in the banking system. Data from 440 commercial banks for the periods 2006-2015 were collected and analysed by seven-variable panel structural vector autoregressive model. There was evidence to show that efficiency responds positively and significantly to shocks in capital, liquidity and asset quality regulations and competition. However, the results reveal all the variables responding to one standard deviation shock in efficiency, suggesting that while the variables matter for efficiency, they all also require efficiency for their effective operation. Hence, the conclusion is that efficiency is central to the effective running of the banking system.

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The interplay of bank competition and institutional quality: Implications for shadow economy

Khattak,

Azmi,

Ali

et al. 2024

Journal of Public Affairs

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This study investigates the impact of institutional quality and banking competition on shadow economy for 127 economies for the period of 2005–2017. It further explores if institutional quality/competition shapes the relationship differently between banking competition/institutional quality and shadow economy. This paper uses the system GMM estimator to tackle potential omitted variable bias, endogeneity, and simultaneity issues. The findings suggest that overall, greater competition among banks and stricter institutions in the country reduce the size of shadow economy. Furthermore, impact of competition on shadow economy is even stronger in countries with weak institutions and the impact of institutional quality is greater in lower competitive environment. Only severe competition matters for shadow economy in case of developed countries. To sum up the novel findings of this research, competition and institutions complement each other in reducing the size of shadow economy. These findings are robust to different econometric estimators. The findings carry vital policy implications for the governments and regulators to play their part in reducing the shadow economy.

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The implication of banking competition: Evidence from African countries

Cited by 46 publications

References 53 publications

Competitive Condition of Sub-Saharan Africa Commercial Banks

Competitive Condition of Sub-Saharan Africa Commercial Banks

Do competition, regulation and stability matter for eﬃciency in Sub-Saharan African banking sectors?

The interplay of bank competition and institutional quality: Implications for shadow economy

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