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Do business strategies vary across firms in the banking industry? New perspectives from the bank size–profitability nexus |
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| Authors: | Clement Olalekan Olaniyi Titus Ayobami Ojeyinka Xuan Vinh Vo Mamdouh Abdulaziz Saleh Al-Faryan |
| Institution: | 1. Department of Economics, Obafemi Awolowo University, Ile-Ife, Nigeria;2. Institute of Business Research, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam
CFVG, University of Economics Ho Chi Minh City, Ho Chi Minh City, Vietnam;3. Department of Accounting and Financial Management, Faculty of Business and Law, University of Portsmouth, Portsmouth, UK |
| Abstract: | This study examines the roles of interdependence and policy variations across firms in the causality between bank size and profitability in Nigeria, using second-generation estimators and the Dumitrescu–Hurlin panel Granger non-causality test. The findings support different business strategies and policy variances across banks. Causality is found non-existent in the cases of 11 banks. A unidirectional causality from size to profitability is established in two banks while evidence of a unidirectional causality is established from profitability to bank size in the other two banks. This study concludes that cross-sectional dependence and policy variations across firms matter in the bank size–profitability nexus. |
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