Determinants of commercial banks' profitability in Malawi: a cointegration approach
AbstractThis article investigates the relationship between market structure and profitability of commercial banks in Malawi using time series data between 1970 and 1994. It uses time-series techniques of cointegration and error-correction mechanism to test the collusion hypothesis and determine whether a long-run relationship exists between profits of commercial banks and concentration in the banking industry. The results obtained from the study support the traditional collusion hypothesis of a long-run positive relationship between concentration and performance. The dynamic short-run analysis also shows a high speed of adjustment in profitability from disequilibrium and indicates a positive response in profitability to a negative deviation from a long-run equilibrium.
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Bibliographic InfoArticle provided by Taylor and Francis Journals in its journal Applied Financial Economics.
Volume (Year): 13 (2003)
Issue (Month): 8 ()
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Web page: http://www.tandf.co.uk/journals/routledge/09603107.html
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