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

Eze Osuagwu ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the level of competition in the Nigerian banking industry employing a non-structural approach deduced from Panzar and Rosse (1987) model, on a bank level data 2005 – 2014. The crux of this paper is to ascertain the prevailing market structure in the Nigerian banking industry following the recapitalization policy that took effect in 2005. Empirical evidence from the Panzar and Rosse H-statistic reveals that the market structure of the Nigerian banking industry is monopolistic competition, which implies that banking products and services are homogenous but differentiated, and firms are independent in their decision-making and conduct. Findings also suggest that bank competitiveness decreases as revenue profile tends toward an inclusion of non-interest income or fee based services.

Keywords: Bank competition; bank consolidation; market structure; Panzar-Rosse (search for similar items in EconPapers)
JEL-codes: L16 (search for similar items in EconPapers)
Date: 2016-03, Revised 2017-01
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Citations: View citations in EconPapers (5)

Published in Research in international business and finance 41 (2017): pp. 412-422

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Journal Article: Empirical assessment of the competitive conduct of Nigerian banks in a post-consolidation era (2017)
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