 Banking sector competition and intermediation efficiency in KenyaSamuel Kiemo and Anne Kamau African Development Review, 2021, vol. 33, issue 4, 648-661 Abstract: This paper seeks to evaluate efficiency and competition dynamics of the banking sector in Kenya for the period 2001–2017 using bank‐level data for 37 commercial banks. We apply non‐parametric data envelopment analysis to analyze measures of various aspects of efficiency in the banking sector. We also adopt Panzar–Rosse, H‐statistics to assess the level of competition in the banking sector. To examine the effect of efficiency on competition, panel estimators are applied. The study findings indicate that efficiency was on an upward trend and averaged 69%. The banking sector is characterized by monopolistic competition as shown by an H‐statistic of .59. Managerial ability measured by data envelopment analysis efficiency score was found to be an important factor in promoting competition for the Kenyan banking sector. The study shows that there is room for Kenyan banks to improve their efficiency by optimizing the scale of operations and continuing to adopt technology. This paper recommends policy makers to continue adopting policies that promote greater banking sector efficiency and competition. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:afrdev:v:33:y:2021:i:4:p:648-661 Ordering information: This journal article can be ordered from Access Statistics for this article African Development Review is currently edited by John C. Anyanwu, Hassan Aly and Kupukile Mlambo More articles in African Development Review from African Development Bank Contact information at EDIRC. |
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