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Purpose – The chapter tests the effects of capitalisation on market structure within the context of Nigerian banking sector reform.Design/methodology/approach – The…
Purpose – The chapter tests the effects of capitalisation on market structure within the context of Nigerian banking sector reform.
Design/methodology/approach – The chapter is based on data collected through secondary sources, mainly from financial statements of banks audited by the CBN. The time period under review is 2001–2009, encompasses the 18 months transitional window and a trajectory of 3 years before the consolidation announcement. Quantitative methods were used to analyse available data.
Findings – The result confirms that banking consolidation led to an increase in the size of the top end of Nigerian banks.
Originality/value – This is the first study that tests the effects of capitalisation on market structure of the Nigerian banking sector.
This paper outlines the theoretical models of international cash management and assesses their implications for corporate practice. Corporate practice is then reviewed…
This paper outlines the theoretical models of international cash management and assesses their implications for corporate practice. Corporate practice is then reviewed through the analysis of survey research and case studies. It emerges that whilst the implications of theoretical models are captured in essence by corporate practice, there is scant evidence of companies using sophisticated models in international cash management. The practice of international cash management is largely driven by developments in communications and computer technology, relaxation of regulatory and tax impediments, the internationalisation of banking and the development of new banking prod ucts. International treasurers may therefore be able to find appropriate cash management solutions to meet their business needs with the co‐operation of banks and technology providers. Further academic research should evaluate the extent to which corporate practice is consistent with extant multi‐currency balance and net work optimisation models and also explain why particular approaches to interna tional cash management persist in companies.
Purpose – The purpose of this paper is to examine the relationship between banking sector efficiency and economic growth in Africa.Methodology/approach – The paper used…
Purpose – The purpose of this paper is to examine the relationship between banking sector efficiency and economic growth in Africa.
Methodology/approach – The paper used the stochastic frontier approach stating the banking sector cost function as a Fourier flexible to estimate bank efficiency. We then used the Arellano–Bond GMM estimator to investigate the relationship between banking sector efficiency and economic growth. Annual data for banking sector financial statements were used in estimating efficiency scores.
Findings – The study found banking sector efficiency in the sample to be 69%. We also found a positive relationship between banking sector efficiency and economic growth, confirming the critical role banks play in the economy.
Practical implications – Banking sector efficiency score of 69% implies banks in Africa could save up to 31% of their total cost if they were to operate efficiently. Policy direction should therefore focus on policies and incentives that will improve the efficiency of the banking sector and hence economic growth. The study brings to the fore the importance of the qualitative aspect of the banking sector in allocating financial resources in the real economy. Focus in the real economy should not be only on the size of the banking system but also on the quality with which resources are allocated.
Originality/value of paper – This study is among the first dedicated solely to African countries. It does set the pace for future research in the area and also confirms in Africa the Schumpeterian hypothesis that the banking sector is key in allocating resources in the real economy.