Abstract

The Nigerian banking consolidation process is examined using a dynamic panel for the period 2000–2010. The Arellano and Bond (1991) dynamic general method of moment approach is adopted to estimate a cost function taking into account the possible endogeneity of the covariates. The main finding is that the Nigerian banking sector has benefited from the consolidation process, and specifically that foreign ownership, mergers and acquisitions, and bank size decrease costs. Directions for future research are also discussed.

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