Is Bank Performance What it is, in Light of Bank Earnings Management and Bank Market Structure? – Evidence from the Emerging and the Frontier Markets

2011 ◽  
Author(s):  
Nacasius U. Ujah ◽  
Collins Emeka Okafor
Keyword(s):  
Earnings Management ◽  
Market Structure ◽  
Bank Performance ◽  
Bank Market Structure

Market structure-performance hypothesis in Kenyan banking industry

2015 ◽  
Vol 10 (4) ◽  
pp. 697-710 ◽  
Author(s):  
Solomon W. Giorgis Sahile ◽  
Daniel Kipkirong Tarus ◽  
Thomas Kimeli Cheruiyot
Keyword(s):  
Market Structure ◽  
Market Efficiency ◽  
Market Share ◽  
Commercial Banks ◽  
Banking Sector ◽  
Banking Industry ◽  
Developing Economies ◽  
Market Concentration ◽  
Bank Performance ◽  
Content Type

Purpose – The purpose of this paper is to test market structure-performance hypothesis in banking industry in Kenya. Specifically, the structure-conduct-performance (SCP) and market efficiency hypotheses were examined to determine how market concentration and efficiency affect bank performance in Kenya. Design/methodology/approach – The study used secondary data of 44 commercial banks operating from 2000 to 2009. Three proxies to measure bank performance were used while market concentration and market share were used as proxies for market structure. Market concentration was measured using two concentration measures; the concentration ratio of the four largest banks (CR4) and Herfindahl-Hirschman Index, while market share was used as a proxy for efficiency. The study made use of generalized least square regression method. Findings – The empirical results confirm that market efficiency hypothesis is a predictor of firm performance in the banking sector in Kenya and rejects the traditional SCP hypothesis. Thus, the results support the view that efficient banks maximize profitability. Practical implications – The study provides insights into the role of efficiency in enhancing profitability in commercial banks in Kenya. It has managerial implication that profitable banks ought to be efficient and dispels the notion of collusive behavior as a precursor for profitability. Originality/value – The paper fills an important gap in the extant literature by proving insights into what determines bank profitability in banking sector in Kenya. Although this area is rich in research, little work has been conducted in the developing economies and in particular no study in the knowledge has addressed this critical issue in Kenya.

Market structure, strategic choices and bank performance: a path model

2014 ◽  
Vol 40 (6) ◽  
pp. 538-564 ◽  
Author(s):  
Samir Belkhaoui ◽  
Lassaad Lakhal ◽  
Faten Lakhal ◽  
Slaheddine Hellara
Keyword(s):  
Market Structure ◽  
Path Analysis ◽  
Conceptual Model ◽  
Market Share ◽  
Indirect Effect ◽  
Commercial Banks ◽  
Strategic Choice ◽  
Bank Performance ◽  
Analysis Method ◽  
Content Type

Purpose – The purpose of this paper is to develop and test a conceptual model of bank performance. Design/methodology/approach – The papers build a system of causal relationships between market structure, strategic choice and bank performance using the path analysis method. The sample includes commercial banks from 11 emerging countries. Findings – Results show that market structure has a positive and indirect effect on bank performance, and that market share has a positive and direct effect on bank performance. Strategic variables related to risk taking and diversification affect directly and indirectly bank performance. The indirect effect occurs via market share. The results suggest that the mediating role played by the strategic choice in the relationship between market structure and performance is complete. Originality/value – The contribution of this paper is threefold. The first one is to develop a conceptual model to explain bank performance. The model includes simultaneously direct and indirect causal relationships between market structure, strategic choice and bank performance. The second one is the use of the path analysis method to estimate the direct and indirect relationships. The third one is related to the sample including commercial banks in emerging markets.

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