Impact of Consolidation on Employment in the Nigerian Banking Industry: 2000 - 2020
DOI:
https://doi.org/10.2022/lje.v4i1.66Keywords:
Banking industry, Recapitalisation, Consolidation, EmploymentAbstract
This study investigates the impact of bank consolidation on employment in Nigerian banking industry. The study determined whether banks consolidation enhances employment in the industry or not. Data were sourced from Central Bank of Nigeria (CBN), Nigerian Deposit Insurance Cooperation (NDIC), and Annual Reports of the commercial banks. Based on Interrupted Time-Series Quasi-Experimental Design (ITSQED), T-test of significant difference was conducted at 5% level of significance on the annual total employment in the industry five years before and five years after the year 2006 consolidation. Finding reveals that the consolidation significantly improved employment in the industry. The improvement was attributed to the complementary role of labour to increased capital. Consequently, it was recommended, that banks should be encouraged to further increase their capital base, but not necessary through mandatory recapitalisation so as to provide more jobs in the industry. This can be done through issuances of stock dividend which increases capital but does not lead to reduction in the number of banks.
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