文章基本信息

标题：Does Competition Cause Stability in Banks? SFA and GMM Application to Sub-Saharan Africa Commercial Banks
本地全文：下载
作者：Joseph Olorunfemi Akande ; Farai Kwenda
期刊名称：Journal of Economics and Behavioral Studies
电子版ISSN：2220-6140
出版年度：2017
卷号：9
期号：4
页码：173-186
DOI：10.22610/jebs.v9i4(J).1832
语种：English
出版社：International Foundation for Research and Development (IFRD)
摘要：Investigating the competition-stability view in relation to the banking sector, the intention behind this study was to find out how far efficiency is associated with a competitive banking environment and if it warrants the continued agitation towards fostering increased competition in banking markets around the world. This view has significant support in spite of the potential instability that could possibly result from risk appetite, which the competition-fragility view holds to be associated with competition. We employed a stochastic frontier analysis (SFA) to model an instrumental variable of competition resulting from increased efficiency or inefficiency due to bank-level competition, which we used in the regression of competition against stability using the generalized method of moments (GMM). We found that competition increased the efficiency of the banking sector over the study period. The regression results of our instrument against stability in the Sub-Saharan Africa region was found to be positive and strongly significant with stability providing evidence of transmission from competition to efficiency to stability, and, hence consistent with competition-stability views. Our conclusion is that while competition is desirable, it must be optimized to enhance efficiency without which the effects become detrimental. Therefore, there must be ongoing regulation to check excessive competition.
关键词：Competition;Stability;Efficiency;Stochastic Frontier Analysis;Commercial Banks