COMPETITION AND FINANCIAL STABILITY OF BANKS IN NIGERIA: EXPLORING THE RELATIONAL EFFECT OF ECONOMIC CONDITIONS
Leonard Achile Ogwuche, Kabiru Umar and John Onoja
Volume 3 Issue 2
Abstract
The study assessed the effect of economic conditions on the relationship between competition and financial stability of banks in Nigeria, the panel Autoregressive Distributed Lag (ARDL). The results of PMG model estimation indicate that long run relationship between dependent and explanatory variables is statistically positively significant at 5 percent. The finding shows suggest that economic conditions have long run significant effect on the relationship between competition and financial stability of banks in Nigeria. The result shows that convergence to long-run equilibrium is at a speed of 11 percent with the adjustment term negative and statistically significant at the 1% level. The study concludes that economic conditions moderate the relationship between competition and financial stability of banks in Nigeria/ Thus, it is recommended that should economy managers should continue optimize monetary policies that will hedge local economies from external shocks. Keywords: Competition, Bank, Economic, Finance
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