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Empirical assessment of the competitive conduct of Nigerian banks in a post-consolidation era

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  • Osuagwu, Eze Simpson
  • Nwokoma, Ndubisi

Abstract

This paper is an empirical assessment of the level of competition in the Nigerian banking industry following the consolidation exercise, using a bank-level panel data, for the period 2005–2014. Empirical evidence from the Panzar and Rosse (1987) H-statistic reveals that market power in the Nigerian banking industry is consistent with monopolistic competition, which implies that firms are independent in their decision-making and conduct. This study innovates by incorporating non-interest income accounts in the assessment of revenue, and findings suggest that bank competitiveness decreases as revenue tends toward an inclusion of non-interest income or fee-based services.

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  • Osuagwu, Eze Simpson & Nwokoma, Ndubisi, 2017. "Empirical assessment of the competitive conduct of Nigerian banks in a post-consolidation era," Research in International Business and Finance, Elsevier, vol. 41(C), pages 412-422.
    • Handle: RePEc:eee:riibaf:v:41:y:2017:i:c:p:412-422
    DOI: 10.1016/j.ribaf.2017.04.051
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    Cited by:

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    2. Ngozi Adeleye & Evans Osabuohien & Ebenezer Bowale & Oluwatoyin Matthew & Emmanuel Oduntan, 2018. "Financial reforms and credit growth in Nigeria: empirical insights from ARDL and ECM techniques," International Review of Applied Economics, Taylor & Francis Journals, vol. 32(6), pages 807-820, November.
    3. Steve Motsi & Oluseye Samuel Ajuwon & Collins Ntim, 2018. "Bank Competition in Sub-Saharan African Countries: Has Anything Changed in the Light of 2007-2008 Global FinancialCrisis?," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 68(1), pages 59-83, January-M.
    4. Evans S. Osabuohien & Ayobami O. Soogun & Ese Urhie, 2017. "Examining the Relative Roles of Domestic and Foreign Direct Investments in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 365-371.
    5. Osuagwu, Eze Simpson & Isola, Wakeel & Nwaogwugwu, Isaac, 2018. "Measuring Technical Efficiency and Productivity Change in the Nigerian Banking Sector: A Comparison of non-parametric DEA and parametric SFA," MPRA Paper 112948, University Library of Munich, Germany.

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    More about this item

    Keywords

    Bank competition; Bank consolidation; Banking reform; Panzar-Rosse H-statistic;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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