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Do Positive Bank Concentration Shocks Impact Economic Growth in South Africa?

  • Eliphas Ndou
  • Thabo Mokoena
Chapter

Abstract

Evidence shows that GDP declines to positive bank concentration shocks. In addition, evidence from the counterfactual analysis shows that actual GDP declines more than the counterfactual suggests. The decline is accentuated by the slowdown in investment, reduction in employment, increased unemployment and reduced credit growth due to the unexpected increase in bank concentration. Therefore, it is important for policymakers to lower the entry barriers and introduce a sliding scale of capital adequacy ratios that rise with the size of the banks.

References

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  2. Cetorelli, N., & Gambera, M. (2001). Banking market structure, financial dependence and growth: International evidence from the industry data. Journal of Finance, 56(2), 617–648.CrossRefGoogle Scholar
  3. Feldmannn, H. (2013). Banking systems concentration and labour market performance in industrial countries. Contemporary Economic Policy, 31(4), 719–732.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Eliphas Ndou
    • 1
    • 3
    • 4
  • Thabo Mokoena
    • 2
  1. 1.Economic Research DepartmentSouth African Reserve BankPretoriaSouth Africa
  2. 2.Department of Economic, Small Business Development, Tourism and Environmental AffairsFree State Provincial GovernmentBloemfonteinSouth Africa
  3. 3.School of Economic and Business SciencesUniversity of the WitwatersrandJohannesburgSouth Africa
  4. 4.Wits Plus, Centre for Part-Time StudiesUniversity of the WitwatersrandJohannesburgSouth Africa

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