Freedom, competition and bank profitability in Sub-Saharan Africa

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dc.contributor.authorSarpong-Kumankoma, E.
dc.contributor.authorAbor, J.
dc.contributor.authorAboagye, A.Q.Q.
dc.contributor.authorAmidu, M.
dc.date.accessioned2019-06-18T11:10:02Z
dc.date.available2019-06-18T11:10:02Z
dc.date.issued2018-11
dc.description.abstractPurpose This paper aims to examine the effects of financial freedom and competition on bank profitability. Design/methodology/approach The study uses system generalized method of moments and data from 139 banks across 11 Sub-Saharan African countries during the period 2006-2012. Findings The results of the study show that higher market power (less competition) is positively related to bank profitability, but operating efficiency is a more important determinant of profitability than market power. Also, both financial freedom and economic freedom show a positive impact on bank profits. The authors find evidence that banks with higher market power operating in countries with higher freedom for banking activities are more profitable than their counterparts in countries with greater restrictions on banking activities. Practical implications The results have shown that allowing banks greater freedom to operate would enhance their performance, without necessarily damaging the economy, as operating efficiency appears to be a more important reason for the observed profitability than market power. Originality/value This study provides insight on the ambiguous relationship between competition and bank profitability by considering the moderating effect of financial freedom which has not been taken into account in previous studies.en_US
dc.identifier.citationEmmanuel Sarpong-Kumankoma, Joshua Abor, Anthony Quame Q. Aboagye, Mohammed Amidu, (2018) "Freedom, competition and bank profitability in Sub-Saharan Africa", Journal of Financial Regulation and Compliance, Vol. 26 Issue: 4, pp.462-481, https://doi.org/10.1108/JFRC-12-2017-0107en_US
dc.identifier.otherhttps://doi.org/10.1108/JFRC-12-2017-0107
dc.identifier.otherVol. 26 Issue: 4, pp.462-481
dc.identifier.urihttp://ugspace.ug.edu.gh/handle/123456789/30916
dc.language.isoenen_US
dc.publisherJournal of Financial Regulation and Complianceen_US
dc.subjectLerner indexen_US
dc.subjectCompetitionen_US
dc.subjectBank profitabilityen_US
dc.subjectMarket poweren_US
dc.subjectFinancial freedomen_US
dc.subjectG21en_US
dc.subjectG28en_US
dc.subjectL11en_US
dc.titleFreedom, competition and bank profitability in Sub-Saharan Africaen_US
dc.typeArticleen_US

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