The main aim of this study was to investigate the relationship between competition and efficiency in the South African banking sector, then go further, and see how these variables affect bank soundness. Results show that the impact of competition on efficiency depends on the measure of competition used. When using the Lerner index there is a negative effect of competition on efficiency whilst the opposite is true when using the Boone indicator. In the case of bank soundness, our results are partly consistent with what other researchers have found.
In measuring technical and scale efficiency of Tanzanian Saving and Credit Cooperatives we used a sample of 103 audited financial statements during 2011. Data envelopment analysis was employed to explore the efficiency scores. The results show that average scores are 42%, 52% and 76% for technical, pure technical and scale efficiencies respectively. Since most of the inefficiencies are either technical or scale in nature, the study recommends increasing the operating scale for smaller firms. Firms operating beyond the optimal scale may need to downsize.