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Do Positive Bank Concentration Shocks Impact Employment in South Africa?

  • Eliphas Ndou
  • Thabo Mokoena
Chapter

Abstract

Evidence reveals that employment declines significantly to positive bank concentration shocks and the declines are much bigger to persistently rising shocks than to less persistent shocks. In addition, the counterfactual analysis reveals that the actual employment declines more than the counterfactual suggests. This indicates that the declining credit extension and reduced capital formation amplifies the reduction in employment. Policymakers should reduce the degree of the banking concentration and make the banking system competitive by lowering the entry barriers and by introducing a sliding scale of capital adequacy ratios that rise with the size of the banks.

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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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