Performance assessment of Nigerian banks pre and post consolidation: Evidence from a Bayesian approach

Service Industries Journal

Volumn 32, Issue 2, 2012, Pages 215-229

  Assaf, A George ^a   Barros, Carlos ^b   Ibiwoye, Ade ^c  

^a UNIVERSITY OF MASSACHUSETTS   (United States)

^b UNIVERSITY OF LISBON   (Portugal)

^c UNIVERSITY OF LAGOS   (Nigeria)

Author keywords

banking consolidation; Bayesian random frontier; cost efficiency; heterogeneity; Nigeria

Indexed keywords

BANKING; BAYESIAN ANALYSIS; HETEROGENEITY; PERFORMANCE ASSESSMENT; STOCHASTICITY;

NIGERIA;

EID: 84858311071     PISSN: 02642069     EISSN: 17439507     Source Type: Journal    
DOI: 10.1080/02642069.2010.529135     Document Type: Article

References (59)

1. Adegbite, E. O. 2007. Essentials of money banking, LagosChumek Ventures.
2. Altunbaş, Y., Gardener, E. M., Molyneux, P. and Moore, B. 2001. Efficiency in European banking. European Economic Review, 45: 1931-1955.
3. Amel, D., Barnes, C., Panetta, F. and Salleo, C. 2004. Consolidation and efficiency in the financial sector: A review of the international evidence. Journal of Banking and Finance, 28: 2493-2515.
4. Arpa, M., Giulini, I., Ittner, A. and Pauer, F. 2001. The influence of macroeconomic developments on Austrian banks: Implications for banking supervision. BIS Papers, 1: 91-116.
5. Balogun, E. D. 2007. A review of Soludo's perspective of banking sector reforms in Nigeria, (MPRA Paper No. 3803). Retrieved June 22, 2010, fromhttp://mpra.ub.uni-muenchen.de/3803/
6. Banal-Estañol, A. and Ottaviani, M. 2006. Mergers with product market risk. Journal of Economics and Management Strategy, 15: 577-608.
7. Banal-Estañol, A. and Ottaviani, M. 2007. Bank mergers and diversification: Implications for competition policy. European Financial Management, 13: 578-590.
8. Beck, T., Demirgüç-K, A. and Levine, R. 2003. Law, endowments, and finance. Journal of Financial Economics, 70: 137-181.
9. Beck, T. and Levine, R. 2004. Stock markets, banks and growth: Panel evidence. Journal of Banking and Finance, 28: 423-442.
10. Berger, A. N. 1995. The profit-structure relationship in banking: Tests of market-power and efficient-structure hypotheses. Journal of Money, Credit and Banking, 27: 404-431.
11. Berger, A. and Humphrey, D. 1997. Efficiency of financial institutions: International survey and directions for future research. European Journal of Operations Research, 98: 175-212.
12. Berger, A. and Mester, L. J. 1997. Inside the black box: What explains differences in the efficiencies of financial institutions?. Journal of Banking and Finance, 21: 895-947.
13. Bikker, J. and Haaf, K. 2002. Competition, concentration and their relationship: An empirical analysis of the banking industry. Journal of Banking and Finance, 26: 2191-2214.
14. Binam, J., Gockowski, J. and Nkamleu, G. 2008. Technical efficiency and productivity potential of cocoa farmers in West African countries. The Developing Economies, 46: 242-263.
15. Bos, J. and Schmiedel, H. 2007. Is there a single frontier in a single European banking market?. Journal of Banking and Finance, 31: 2081-2102.
16. Brownbridge, M. 1996. The impact of public policy on the banking system in Nigeria, Zaria, Nigeria: Institute of Development Studies.
17. Carbó, S. and Humphrey, D. B. 2004. Predicted and actual costs from individual bank mergers. Journal of Economics and Business, 56: 137-157.
18. Cavallo, M. and Majnoni, G. 2002. Do banks provision for bad loans in good times? Empirical evidence and policy implications, (World Bank Policy Research Working Paper, No. 2619)
19. Cavallo, L. and Rossi, S. P. 2001. Scale and scope economies in the European banking systems. Journal of Multinational Financial Management, 11: 515-531.
20. Chapelle, K. and Plane, P. 2005a. Technical efficiency measurement with the manufacturing sector in Cote d'Ivoire: A stochastic frontier approach. Journal of Development Studies, 41: 1303-1324.
21. Chapelle, K. and Plane, P. 2005b. Productive efficiency in the Ivorian manufacturing sector: An exploratory study using a data envelopment analysis approach. The Developing Economies, 43: 450-471.
22. Chen, T.-Y. and Yeh, T. L. 2000. A measurement of bank efficiency, ownership and productivity change in Taiwan. The Service Industries Journal, 20: 95-109.
23. Chesher, A. 1984. Testing for neglected heterogeneity. Econometrica, 52: 865-872.
24. Chesher, A. and Santos-Silva, J. 2002. Taste variation in discrete choice models. Review of Economic Studies, 69: 147-168.
25. Chiu, Y-H., Yan, C., Shen, D. B. and Wang, P. C. 2008. Efficiency and capital adequacy in Taiwan banking: BCC and Super DEA estimation. The Service Industries Journal, 28: 479-496.
26. Demir, N., Mahmud, S. and Babuscu, N. 2005. The technical inefficiency effects of Turkish banks after financial liberalization. The Developing Economies, 43: 396-411.
27. Díaz, B., García, M. and Sanfilippo, S. 2004. Bank acquisitions and performance: Evidence from a panel of European credit entities. Journal of Economics and Business, 56: 377-404.
28. Drake, L. and Hall, M. 2003. Efficiency in Japanese banking: An empirical analysis. Journal of Banking and Finance, 27: 891-917.
29. Esho, N. 2001. The determinants of cost efficiency in cooperative financial institutions: Australian evidence. Journal of Banking and Finance, 25: 941-964.
30. Figueira, C., Nellis, J. and Parker, D. 2006. Does ownership affect the efficiency of African Banks?. The Journal of Developing Areas, 40: 37-62.
31. Focarelli, D., Panetta, F. and Salleo, C. 2002. Why do banks merge?. Journal of Money, Credit, and Banking, 34: 1047-1066.
32. Goddard, J., Molyneux, P. and Wilson, J. 2001. European banking: Efficiency, technology and growth, Chichester: John Wiley & Sons.
33. Greene, W. 2005. Fixed and random effects in stochastic frontier models. Journal of Productivity Analysis, 23: 7-32.
34. Hauner, D. and Peiris, S. J. 2005. Bank efficiency and competition in low-income countries: The case of Uganda, (IMF Working paper 5/240)
35. Hesse, H. 2007, June. Financial intermediation in the pre-consolidation banking sector in Nigeria, (World Bank Policy Research Working Paper 4267)
36. Huizinga, H. P., Nelissen, J. H.M. and Vander Vennet, R. 2001. Efficiency effects of bank mergers and acquisitions in Europe, (Tinbergen Institute Discussion Paper 2001-088/3)
37. Igbekele, A. 2008. Technical efficiency analysis of micro-enterprises: Theoretical and methodological approach of the stochastic frontier production functions applied to Nigerian data. Journal of African Economies, 17: 161-206.
38. Koop, G., Jacek, O. and Steel, M. 1997. Bayesian efficiency analysis through individual effects: Hospital cost frontiers. Journal of Econometrics, 76: 77-106.
39. Koop, G. and Steel, M. 2001. "Bayesian analysis of stochastic frontier models". In A companion to theoretical econometrics, Edited by: Baltagi, B. 520-573. Oxford: Blackwell.
40. La Porta, R., Lopez-de-Silanes, F., Shleifer, A. and Vishny, R. 1997. Legal determinants of external finance. Journal of Finance, 52: 1131-1150.
41. Laeven, L. and Majnoni, G. 2003. Loan loss provisioning and economic slowdowns: Too much too late?. Journal of Financial Intermediation, 12: 178-197.
42. Levine, R. 2003. Bank-based or market-based financial systems: Which is better?. Journal of Financial Intermediation, 11: 398-428.
43. Lewis, P. and Stein, H. 1997. Shifting fortunes: The political economy of financial liberalization in Nigeria. World Development, 25: 5-22.
44. Maudos, J., Pastor, J., Pérez, F. and Quesada, J. 2002. Cost and profit efficiency in European banks. Journal of International Financial Markets, Institutions and Money, 12: 33-58.
45. McFadden, D. and Train, K. 2000. Mixed MNL models of discrete response. Journal of Applied Econometrics, 15: 447-470.
46. Molyneux, P., Altunbaş, Y. and Gardener, E. 1996. Efficiency in European banking, Chichester: John Wiley and Sons.
47. Okeahalam, C. C. 2006. Production efficiency in the South African banking sector: A stochastic analysis. International Journal of Applied Economics, 20: 103-123.
48. Oyejide, T. A. 1993. "Effects of trade and macroeconomic policies on African agriculture". In The bias against agriculture: Trade and macroeconomic policies in developing countries, Edited by: Bautista, R. M. and Valdes, A. San Francisco, CA: ICEG/IFPRI, ICS Press. (Chapter 12)
49. Sanusi, S. L. 2010, February 26. "The Nigerian banking industry: What went wrong and the way forward". Text of Convocation Lecture delivered at Bayero University, Kano
50. Sathye, M. 2001. X-efficiency in Australian banking: An empirical investigation. Journal of Banking and Finance, 25: 613-630.
51. Schure, P., Wagenvoort, R. and O'Brien, D. 2004. The efficiency and the conduct of European banks: Developments after 1992. Review of Financial Economics, 13: 371-396.
52. Soludo, C. Paper presented at the 12th Annual Nigerian Economic Summit, Transcorp Hilton. Abuja. Beyond banking sector consolidation in Nigeria,
53. Somoye, R. O.C. 2008. The performance of commercial banks in post-consolidation period in Nigeria: An empirical review. European Journal of Economics, Finance and Administrative Sciences, 14: 62-72.
54. Spiegelhalter, D., Best, N., Bradley, C. and van der Linde, A. 2002. Bayesian measures of model complexity and fit (with discussion). Journal of the Royal Statistical Society Series B, 64: 583-639.
55. Stulz, R. and Williamson, R. 2003. Culture, openness, and finance. Journal of Financial Economics, 70: 313-349.
56. Tsionas, E. G. 2002. Stochastic frontier models with random coefficients. Journal of Applied Econometrics, 17: 127-147.
57. Van den Broeck, J., Koop, J., Osiewalski, J. and Steel, M. 1994. Stochastic frontier models: A Bayesian perspective. Journal of Econometrics, 61: 273-303.
58. Vander Vennet, R. 2002. Cost and profit efficiency of financial conglomerates and universal banks in Europe. Journal of Money, Credit, and Banking, 34: 254-282.
59. Williams, J., Peypoch, N. and Barros, C. P. in press. The Luenberger indicator and productivity growth: A note on the European savings banks sector. Applied Economics, doi:10.1080/00036840802599859