This paper assesses the level of competition in Zimbabwe’s banking sector using the Panzar-Rosse H-statistic. The H-Statistic has been assessed, using the total revenues regression equation, and applying the panel least square regression model with fixed effects. The H-statistics is estimated at 0.56, which result is confirmed, using bank random effects and the General methods of moments. The H-statics obtained from the two methods are 0.54 and 0.51 for the random effect and generalised methods of moments, respectively. The results confirm the presence of monopolistic competition. On an annual basis, the results show that the Zimbabwean banking sector is evolving towards perfect competition. There is need for the government to desist from tampering with market forces as this reduces the amount of competition. This study is important, as there are limited studies on the competition of the banking sector in dollarized economies. Dollarized economies are peculiar in that their characteristics differ from non-dollarized economies.
The study investigated the technical efficiency of the commercial banks in Zimbabwe during the period 2009–2015. The study entailed the decomposition of the technical efficiency into pure technical and scale efficiency to understand the sources of the technical inefficiency in the commercial banks in Zimbabwe. To accomplish the task, the study sampled 11 commercial banks of which 6 are domestic and the other 5 are foreign banks. The study used the data envelopment analysis method. The results of the study revealed that commercial banks in Zimbabwe are technically inefficient with an efficiency score of 82.9%. The average pure technical and scale efficiency scores were 96.6% and 85.6%, respectively. The results imply that technical inefficiency of the Zimbabwean commercial banks is mainly a result of scale inefficiency emanating from decreasing returns to scale. The deduction is that commercial banks in Zimbabwe are operating at below their optimum capacity and hence have scope to increase their operations in order to improve on technical efficiency.
Orientation: The mining industry being the main source of foreign currency for economy is the backbone of the Zimbabwean economy. The performance of the sector has been dwindling of late. The downturn has been attributed to outdated equipment, lack of foreign currency to import modern equipment, expensive new technology and general macroeconomic problems.Research Purpose: Given the problems being faced by the sector, this article investigated the determinants of foreign direct investment (FDI) into the mining sector (MS).Motivation for the study: Given the mining sector’s contribution to the economy, understanding what motivates corporates to invest into the sector is of interest to the policy makers. The decline in investment is a cause of concern.Research approach and method: The study employed the autoregressive distributed lag (ARDL) method to evaluate the determinants of FDI into the Zimbabwean MS.Main Findings: The results show that FDI in the MS is driven by gross domestic product (GDP), wage rates, inflation, interest rates and openness in the long term. In the short run, GDP, wage rates, inflation, interest rates and openness have a significant effect on FDI into the MS.Practical implications: This study recommends that government should put in place pro-growth policies in order to attract more foreign investors. The monetary policy should ensure interest rates are maintained very low to allow local resources to complement FDI.Contribution: The study contributes to the literature on determinants of FDI in the mining sector.
This study empirically examined the relationship between human capital development and economic growth in Zimbabwe for the period 1980 to 2015, using time series analysis techniques of co-integration, error correction model, and Granger causality tests. The study was motivated by changes which have characterised the financing of human capital since the country attained independence. A decade after independence, the government was able to adequately finance the social sectors; however, thereafter government financing has been declining since the adoption of the structural adjustment programme. The findings of this study indicate the existence of a short-run and long-run relationship between human capital development and economic growth in Zimbabwe. On the direction and significance of the relationship, the result is mixed. Human capital development, proxied by government expenditure on health, had a significant positive impact on economic growth—both in the short run and the long run—reaffirming that a healthy labour force will be more productive and efficient. Human capital development, proxied by government expenditure on education, was found to negatively impact economic growth in the long run. In conclusion, a positive relationship between human capital development and economic growth in Zimbabwe was found, although the relationship is weak.
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