Economics-Scholarly Publications

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Browsing Economics-Scholarly Publications by Subject "Bank efficiency"

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    Open Access
    Empirical analysis of structure-conduct-performance paradigm on Nigerian banking industry
    (The Empirical Econometrics and Quantitative Economics Letters, 2014-09) Bello, M.; Isola, W.A.
    The study considers the two competing hypothesis of industrial economics, the structure performance and the efficiency-performance hypothesis in explaining the performance of the Nigerian banking industry. Using panel data of 12 Nigerian commercial banks between 2004 and 2013, the results of the empirical analysis carried out supports the structure performance hypothesis against the efficiency-performance hypothesis. The bank efficiency variable proxy by operating efficiency (EFF) has negative relationship with bank performance (Pre-tax ROA) on the contrary the two market concentration variables (Market share and Herfindahl-Hirschman index) are positively related with Pre-tax ROA. This result, therefore, confirms the existence of structure-performance hypothesis within the Nigeria banking industry. The findings of this study reflects the high emphasis by the regulatory arm, the central bank of Nigeria, on the restructuring of the commercial banking subsector of the economy in terms of vibrant ownership and capital base. However, in order to facilitate the implementation and achievement of efficiency by these banks, vibrant competition policy should be initiated by the regulatory authorities. Besides, efforts should be geared towards ensuring infrastructural improvements, especially power in Nigeria in order to ensure conducive environment within which the industry operates.