Competitive Condition of Sub-Saharan Africa Commercial Banks
Akande Joseph Olorunfemi () and
Kwenda Farai
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Akande Joseph Olorunfemi: University of KwaZulu-Natal, South Africa
Kwenda Farai: University of KwaZulu-Natal, South Africa
Studia Universitatis Babeș-Bolyai Oeconomica, 2017, vol. 62, issue 2, 55-76
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.
Keywords: competitive condition; Sub-Saharan Africa; commercial banks; Lerner index; Generalised Method of Moments (search for similar items in EconPapers)
JEL-codes: G21 L10 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:subboe:v:62:y:2017:i:2:p:55-76:n:4
DOI: 10.1515/subboec-2017-0009
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