Assessment of Comp etition in Banking Sector of Namibia
- bank competition,
- Profit Elasticity model,
- Panzar-Rosse model
Copyright (c) 2018 IJRDO - Journal of Business Management (ISSN: 2455-6661)
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Competition plays a regulatory function in balancing demand and supply, and commercial banks in developing countries take a pivotal role in creating economic growth. They finance trade, industry, agriculture and are the main contributor to capital formation. It is therefore important to measure the competitiveness of commercial banks in developing economies. This paper uses of a modern and more robust analysis technique the Profit Elasticity model, along with the more conventional PanzarRosse model, to examine the competitiveness of commercial banks in Namibia. The loan market data from 2002 to 2016 are utilized for this study. Equally, as the contribution of mortgages to bank assets in Namibia is high, the analysis are solely
conducted on the home loan market, one of the largest sector of the loan market in
Barros, C. P., L. Qi Bin, and N. Peypoch. 2014. “Technical Efficiency in Angolan Banking Sector with the B-Convexity Model.” South African Journal of Economics 82 (3): 443–454.
Baumol, W. J., J. Panzar, and R. D. Willig. 1982. Contextable Markets and the Theory of Industry Structure. New York: Harcourt Brace Jovanovich.
Biekpe, N. 2011. “The Competitiveness of Commercial Banks in Ghana.” African Development Review 23 (1): 75–87. doi:10.1111/afdr.2011.23.issue-1.
Bikker, J. A., and J. M. Groeneveld. 2000. “Competition and Concentration in the EU Banking Industry.” Kredit Und Kapital 30: 62–98.
Bikker, J. A., and K. Haaf. 2002. “Competition, Concentration and Their Relationship: An
Empirical Analysis of the Banking Industry.” Journal of Banking & Finance 26:2191–2214. doi:10.1016/S0378-4266(02)00205-4.
Bikker, J. A., S. Shaffer, and L. Spierdijk. 2012. “Assessing Competition with the Panzar–Rosse
Model: The Role of Scale, Costs, and Equilibrium.” Review of Economics and Statistics 94 (4): 1025–1044. doi:10.1162/REST a 00210.
Bing Xu, Van Rixtel, A., and Van Leuvensteijn, M. 2013. Measuring bank competition in China: a comparison of new versus conventional approaches applied to loan markets, Bank of International Settlements working papers conference,No:422.
Buchs T.D and Mathisen. J. 2005, Competition and efficiency in banking: Behavioral evidence from Ghana, IMF Working Paper, WP:05-17.
Claessens, S., and L. Laeven. 2004. “What Drives Bank Competition? Some International Evidence.” Journal of Money, Credit, and Banking 36: 563–583. doi:10.1353/mcb.2004.0044.
Coccorese, P. 2009. “Market Power in Local Banking Monopolies.” Journal of Banking & Finance 33: 1196– 1210. doi:10.1016/j.jbankfin.2008.12.013.
De Bandt, O., and E. P. Davis. 2000. “Competition, Contestability and Market Structure in European Banking Sectors on the Eve of EMU.” Journal of Banking & Finance 24: 1045–1066. doi:10.1016/S0378-4266(99)00117-X.
Demsetz, H. 1973. “Industry Structure, Market Rivalry, and Public Policy.” The Journal of Law and Economics 16 (1): 1–9. doi:10.1086/jle.1973.16.issue-1.
Hauner, D., and S. J. Peiris. 2008. “Banking Efficiency and Competition in Low-Income Countries: The Case of Uganda.” Applied Economics 40 (21): 2703–2720. doi:10.1080/00036840600972456.
Ikhide, S. 2000. The efficiency of commercial banks in Namibia, Bank of Namibia occasional papers.
Van Leuvensteijn M, Bikker J.A, Van Rixtel A.R.J.M, Christoffer Kok Sorensen. 2007. A new approach to measuring competition in the loan markets of the EURO area, European Central Bank working paper series, No.768.
Mason, E. S. 1949. “The Current Status of the Monopoly Problem in the United States.” Harvard Law Review 62 (8): 1265–1285. doi:10.2307/1336466.
Mlambo, K., and M. Ncube. 2011. “Competition and Efficiency in the Banking Sector in South Africa.” African Development Review 23 (1): 4–15. doi:10.1111/ afdr.2011.23.issue-1.
Molyneux, P., Y. Altunbas¸, and E. Gardener. 1996. Efficiency in European Banking. Chichester: John Wiley and Sons.
Molyneux, P., D. M. Lloyd-Williams, and J. Thornton. 1994. “Competitive Conditions in European Banking.” Journal of Banking & Finance 18: 445–459. doi:10.1016/0378- 4266(94)90003-5.
Nathan, A., and E. H. Neave. 1989. “Competition and Contestability in Canada’s Financial System: Empirical Results.” The Canadian Journal of Economics 22: 576 – 594. doi:10.2307/135541.
Northcott C.A. 2004. Competition in banking: A review of the literature, Bank of Canada working papers, 24. http://www.bankofcanada.ca/2004/06/working-paper-2004-24/.
Panzar, J., and J. Rosse. 1987. “Testing for ‘Monopoly’ Equilibrium.” The Journal of Industrial Economics 35:443–456. doi:10.2307/2098582.
Poshakwale, S. S., and B. Qian. 2011. “Competitiveness and Efficiency of the Banking Sector and Economic Growth in Egypt.” African Development Review 23 (1): 99–120.doi:10.1111/afdr.2011.23.issue-1.
Rosse, J., and J. Panzar (1977). “Chamberlin Vs Robinson: An Empirical Study for Monopoly Rents.” Bell Laboratories Economic Discussion Paper.
Schaeck, K., M. Cihak, and S. Wolfe. 2009. “Are Competitive Banking Systems More Stable?”, Journal of Money, Credit, and Banking 41: 711–734. doi:10.1111/jmcb.2009.41.issue-4.
Shaffer, S. (1982). A Non-Structural Test for Competition in Financial Markets. Proceedings of a Conference on bank structure and competition, Federal Reserve Bank of Chicago, 225–243.
Shaffer, S. 2002. “Conduct in a Banking Monopoly.” Review of Industrial Organization 20: 221–238. doi:10.1023/ A:1015091407841.
Shaffer, S., and J. DiSalvo. 1994. “Conduct in a Banking Duopoly.” Journal of Banking & Finance 18: 1063–1082. doi:10.1016/0378-4266(94)00060-3