Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Nachum, Lilach; Ogbechie, Chris

doi:10.1080/23322373.2019.1648999

Cited by 7 publications

(3 citation statements)

References 37 publications

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“…Previously, this was hampered by regulatory restrictions, particularly in developing countries. The local banks’ acquisition through privatization policies and the creation of subsidiaries is the main catalysts for foreign investors (Nachum & Ogbechie, 2019). Similarly, foreign ownership can allow the transfer of new management methods and knowledge to local banks.…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of Bank Profitability in the Context of Financial Liberalization: Evidence from Morocco

Belcaid

Al‐Faryan

2023

Business Perspectives and Research

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This article aims, in the context of financial liberalization, to examine the impact of several internal and external factors in relation to the profitability of banks listed on the Moroccan stock exchange. The study uses the panel data method on a sample of the six banks with the largest market shares over the 2010–2019 period to investigate the influence of ownership structure, bank governance, capital structure, prudential regulation, and also a macroeconomic variation on bank profitability. Accordingly, the empirical results indicate a negative relationship between concentration, foreign ownership, and bank profitability. Further, high capital structure ratios, especially solvency, liquidity, and capitalization ratios appear to have an undesirable effect on the performance of Moroccan banks. In contrast, the impact of domestic institutional ownership is positive, implying that profitability is more favored by domestic ownership than by foreign ownership. Our findings also highlight the importance of independent directors and board size. Therefore, liberalizing ownership and opening up the board to the expertise of outside directors is essential for the banking sector’s development. In terms of policy implications, central banks and regulators need to ensure that banks rigorously adhere to specified leverage and fixed capital adequacy ratios while ensuring optimal liberalization for bank performance.

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Section: Literature Reviewmentioning

confidence: 99%

Determinants of Bank Profitability in the Context of Financial Liberalization: Evidence from Morocco

Belcaid

Al‐Faryan

2023

Business Perspectives and Research

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“…Similar inconsistencies are found with respect to the institutional determinants of foreign venture capital (Hearn, Oxelheim, & Randøy, 2018 ). Nachum and Ogbechie ( 2019 , 2023 ) demonstrate competitive dynamics between foreign and local banks in Nigeria that are inconsistent with the notion of the liability of foreignness. Researchers have identified puzzling theoretical inconsistencies in MNEs’ non-market strategies for dealing with corruption, political risk, CSR, and crony capitalism in Africa (e.g., Darendeli & Hill, 2016 ; Parente, Rong, Geleilate, & Misati, 2019 Stevens & Newenham-Kahindi, 2017 , 2021 ).…”

Section: Africa As a Source Of Theoretical Puzzles For Ibmentioning

confidence: 99%

Africa rising: Opportunities for advancing theory on people, institutions, and the nation state in international business

et al. 2022

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Africa is rising, but IB scholars have largely failed to take notice. We argue that this is a missed opportunity. Not only is Africa a dynamic and distinctive region, but its rise presents a number of puzzles for international business (IB) research, with phenomena that seem to challenge fundamental assumptions underlying IB theories. In order to unravel these puzzles and better explain business dynamics on the continent, we contend that there is a need for IB theorizing to place greater emphasis on the role of people , to balance IB’s traditional emphasis on institutions, location-specific assets, and other macro-level attributes. We explore how this conceptual shift presents new avenues for inquiry into issues that are of importance for IB but have received limited attention to date. Such issues include entrepreneurial human capital, social networks, institutional co-evolution, and the informal economy. As such, we argue that, while extant theories in IB inform explanations and predictions regarding business activity across the continent, Africa’s diverse and distinctive characteristics offer the potential to serve as a context for testing and developing generalizable, cutting-edge IB theory. Supplementary Information The online version contains supplementary material available at 10.1057/s41267-022-00581-z.

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“…Onura (2019) gave comprehensive reasons on low derivatives market activities in west Africa. The study on effect of capital market on economic growth and development of Nigeria (2000Nigeria ( -2017, brought into focus that among other reasons why capital market in Nigeria had not developed was because of unavailability of internet services, poor capital market security and unfavorable governmental policies with political selfish interests.The presence of low concentration of foreign owned banks in Nigeria which was 6% according to Nachum and Ogbechie (2019), had greatly affected the derivatives market. The study which concentrated on understanding the negative aspects of having 94% locally owned banks in Nigeria, shed light that the country had greatly lost in terms of foreign direct investments making it lag behind especially in application of derivatives market in its stock exchange.…”

Section: Empirical Reviewmentioning

confidence: 99%

The Relationship Between Options Derivatives and Financial Performance of Selected Listed Commercial Banks in Kenya

Muthine

Mutea

Kanyaru

2021

IJF

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Purpose: The purpose of the study was to ascertain the relationship between options derivatives and financial performance of selected listed commercial banks in Kenya. Methodology: Descriptive research design was used when collecting data using closed ended questionnaires from the selected 11 listed commercial banks in Kenya. The target population included 156 respondents who were 25 risk managers, 53 operations managers, 33 credit managers and 45 marketing managers to participate in the study. The study selected all of the 156 respondents through census sampling technique. Pre-test questionnaires was sent to six respondents who were junior officers in risk, credit, operations and marketing departments of non-listed commercial banks in Meru Kenya. The collected data was then coded and analyzed quantitatively using the descriptive statistics such as mean, percentage and standard deviation while inferential statisticsperson correlation analysis were used. Linear regression models were also used. Further on, the tables, graphs were used when indicating the analysis results. Results: Options had a statistically significant relationship with financial performance. Most respondents agreed that there were clear procedures used to solve options price discrepancies. It had a mean of 4.79 and standard deviation of 0.62. However, most respondents disagreed that options derivatives market activities were improving in the banks. It had a mean of 3.85 and standard deviation of 1.05. The results further indicated that options had an R value of .793a and Durbin Watson value of 1.292 showing there was a strong correlation between the two variables, while the R-square was 0.629. This implied that options as a paradigm predicted 62.9% of financial performance variable in this study.Options also had a significant p-value of 0.018. Unique contribution to theory, policy and practice: The results indicated that commercial banks were really incurring more costs as compared to profits generated due to errors made by the employees when engaging in various options derivatives markets. In addition, when financial derivatives owners were given the rights and not forced to purchase or vend an underlying asset at a strike price or exercise price, at or earlier than the expiry date of the options, there was an above average purchase. The study recommends that the bank staff should explain full information on the options derivatives so that when a client is making the purchase, they are well knowledgeable. This knowledge should begin from the procedures followed when making a purchase, sale or transfer of option derivatives in the securities exchange market. In addition, any costs associated with the options derivatives should be fully communicated to clients priorly to avoid premature termination of options derivatives contracts. Further on, there should be more training on banks staffs by the bank management so that they are equipped with knowledge on the specifics of options derivatives trading. By doing so, the chances of errors would be minimized.

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Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Cited by 7 publications

References 37 publications

Determinants of Bank Profitability in the Context of Financial Liberalization: Evidence from Morocco

Determinants of Bank Profitability in the Context of Financial Liberalization: Evidence from Morocco

Africa rising: Opportunities for advancing theory on people, institutions, and the nation state in international business

The Relationship Between Options Derivatives and Financial Performance of Selected Listed Commercial Banks in Kenya

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