An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe
This paper assesses the level of competition in Zimbabwe’s banking sector using the Panzar-Rosse H-statistic. The H-Statistic has been assessed, using the total revenues regression equation, and applying the panel least square regression model with fixed effects. The H-statistics is estimated at 0.5...
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doaj-c5331c3b92a4422688ce8af314ffd6922021-02-02T04:10:39ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032016-08-019245547010.4102/jef.v9i2.5250An application of Panzar-Rosse Approach in assessing banking sector competition in ZimbabweSanderson Abel0Pierre le Roux1Department of Economics, Nelson Mandela Metropolitan UniversityDepartment of Economics, Nelson Mandela Metropolitan UniversityThis paper assesses the level of competition in Zimbabwe’s banking sector using the Panzar-Rosse H-statistic. The H-Statistic has been assessed, using the total revenues regression equation, and applying the panel least square regression model with fixed effects. The H-statistics is estimated at 0.56, which result is confirmed, using bank random effects and the General methods of moments. The H-statics obtained from the two methods are 0.54 and 0.51 for the random effect and generalised methods of moments, respectively. The results confirm the presence of monopolistic competition. On an annual basis, the results show that the Zimbabwean banking sector is evolving towards perfect competition. There is need for the government to desist from tampering with market forces as this reduces the amount of competition. This study is important, as there are limited studies on the competition of the banking sector in dollarized economies. Dollarized economies are peculiar in that their characteristics differ from non-dollarized economies.https://jefjournal.org.za/index.php/jef/article/view/52Panzar-RosseBanking competitionFixed EffectsGeneralised methods of MomentsZimbabwe |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Sanderson Abel Pierre le Roux |
spellingShingle |
Sanderson Abel Pierre le Roux An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe Journal of Economic and Financial Sciences Panzar-Rosse Banking competition Fixed Effects Generalised methods of Moments Zimbabwe |
author_facet |
Sanderson Abel Pierre le Roux |
author_sort |
Sanderson Abel |
title |
An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe |
title_short |
An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe |
title_full |
An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe |
title_fullStr |
An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe |
title_full_unstemmed |
An application of Panzar-Rosse Approach in assessing banking sector competition in Zimbabwe |
title_sort |
application of panzar-rosse approach in assessing banking sector competition in zimbabwe |
publisher |
AOSIS |
series |
Journal of Economic and Financial Sciences |
issn |
1995-7076 2312-2803 |
publishDate |
2016-08-01 |
description |
This paper assesses the level of competition in Zimbabwe’s banking sector using the Panzar-Rosse H-statistic. The H-Statistic has been assessed, using the total revenues regression equation, and applying the panel least square regression model with fixed effects. The H-statistics is estimated at 0.56, which result is confirmed, using bank random effects and the General methods of moments. The H-statics obtained from the two methods are 0.54 and 0.51 for the random effect and generalised methods of moments, respectively. The results confirm the presence of monopolistic competition. On an annual basis, the results show that the Zimbabwean banking sector is evolving towards perfect competition. There is need for the government to desist from tampering with market forces as this reduces the amount of competition. This study is important, as there are limited studies on the competition of the banking sector in dollarized economies. Dollarized economies are peculiar in that their characteristics differ from non-dollarized economies. |
topic |
Panzar-Rosse Banking competition Fixed Effects Generalised methods of Moments Zimbabwe |
url |
https://jefjournal.org.za/index.php/jef/article/view/52 |
work_keys_str_mv |
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