Strengthening Banking Research through System GMM

Dynamic financial systems demand dynamic models. The System Generalised Method of Moments (System GMM), developed by Arellano and Bover (1995) and Blundell and Bond (1998), remains one of the most rigorous tools for examining bank performance when past values of dependent variables influence current outcomes. At SASNG Econometric Services, we integrate this technique into our consulting and research support for African banks and policymakers.

In emerging markets such as Nigeria, data often suffer from endogeneity, measurement bias, and limited time series depth. System GMM resolves these by using internal instruments, producing consistent estimators even when explanatory variables are endogenous. Our team employs this framework to test the dynamic interplay among capital adequacy, leverage, AI disclosure, and profitability, guiding both academic studies and regulatory strategy design.

By combining Stata-based estimation, diagnostic testing, and contextual interpretation, SASNG ensures clients obtain results that are both statistically robust and economically meaningful.

Keywords: System GMM Nigeria, dynamic panel data, banking econometrics.