Industry Structure and Organisational Performance : Evidence from the Nigerian Commercial Banks

Considerable efforts have been made in Europe and America to investigate the relationship between industry structure and organisation performance. This study extends such investigation to Nigeria. Results are presented for tests of the two contending hypotheses of market structure on the Nigerian commercial banking industry using pooled data for the period of 1990 to 2000. Generally, the study finds evidence of a significant and positive relationship between concentration and profitability in the Nigerian banking industry and concludes that banking products and services in Nigeria are inefficiently priced. The study cautioned against the use of mergers and acquisitions as well as other related policies to managing banking crisis as these might lead to further concentration of the industry