Farai Kwenda

Stimulating competition in the bank system without compromising the stability constitutes a major puzzle that bank regulators and practitioners face. Hitherto, empirical studies focusing on Sub-Saharan Africa in addressing these issues for the anticipated regional integration and sustainable growth are rare. This study applied structural equation modelling to simultaneously analyze competition, regulation and stability in a panel of 440 Sub-Saharan African commercial banks over the period from 2006 to 2015. The results provided evidence that competition affects stability via efficiency and that regulation affects stability via competition and efficiency. This study produced critical theoretical and methodological insights with substantial implications for the conduct of bank regulatory policy.

This study investigates how variation in monitoring intensity affects the efficiency of firms’ investment decisions in an emerging market in South Africa. The study hypothesis argues that the distraction of institutional shareholders has a statistically significant positive effect on corporate investment inefficiency. Using a more robust Generalized Method of Moments (Sys GMM) estimation approach to analyze data collected for firms listed at the Johannesburg Stock Exchange (JSE) for the period 2004–2019, the results showed that the distraction of institutional shareholders has a positive and statistically significant impact on investment inefficiency. That is, when the attention of institutional shareholders is shifted, the intensity of their monitoring drops, and the executive is involved in investment decisions that are not profitable. This insight has an implication for stakeholders and the value-creating corporate governance mechanism. The study concludes that institutional shareholders must always sustain their monitoring intensity to ensure that corporate decisions are consistent with the firm’s value.