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Competitive Condition of Sub-Saharan Africa Commercial Banks

Author

Listed:
  • Akande Joseph Olorunfemi

    (University of KwaZulu-Natal, South Africa)

  • Kwenda Farai

    (University of KwaZulu-Natal, South Africa)

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.

Suggested Citation

  • Akande Joseph Olorunfemi & Kwenda Farai, 2017. "Competitive Condition of Sub-Saharan Africa Commercial Banks," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 62(2), pages 55-76, August.
    • Handle: RePEc:vrs:subboe:v:62:y:2017:i:2:p:55-76:n:4
    DOI: 10.1515/subboec-2017-0009
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    More about this item

    Keywords

    competitive condition; Sub-Saharan Africa; commercial banks; Lerner index; Generalised Method of Moments;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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