Spillover and Competition Effects: Evidence from the sub-Saharan African Banking Sector
AbstractThis paper examines the efficiency effects of foreign bank entry on domestic banks in sub- Saharan Africa during the period 1999–2006. Using a recently compiled dataset on foreign bank presence, the competition and spillover effects of North–South, regional and nonregional South–South banks are distinguished. The results show that the competitive pressure on domestic banks' net interest margins emanates only from regional South–South banks. There is evidence of spillover effects from North-South and regional South-South banks on domestic banks. As domestic banks invest in foreign technologies, their overhead costs increase in the short-run. Non-regional South-South banks seem to have little effect on the efficiency of domestic banks.
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Bibliographic InfoPaper provided by GIGA German Institute of Global and Area Studies in its series GIGA Working Paper Series with number 165.
Length: 30 pages
Date of creation: Apr 2011
Date of revision:
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Other versions of this item:
- Pohl, Birte, 2011. "Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector," Proceedings of the German Development Economics Conference, Berlin 2011 66, Verein für Socialpolitik, Research Committee Development Economics.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-05-14 (Africa)
- NEP-ALL-2011-05-14 (All new papers)
- NEP-BAN-2011-05-14 (Banking)
- NEP-COM-2011-05-14 (Industrial Competition)
- NEP-EFF-2011-05-14 (Efficiency & Productivity)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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"Making finance work for Africa,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-3125420, Tilburg University.
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"Determinants of commercial bank interest margins and profitability : some international evidence,"
Policy Research Working Paper Series
1900, The World Bank.
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- Claessens, Stijn & Demirguc-Kunt, Asl[iota] & Huizinga, Harry, 2001. "How does foreign entry affect domestic banking markets?," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 891-911, May.
- Lensink, Robert & Hermes, Niels, 2004. "The short-term effects of foreign bank entry on domestic bank behaviour: Does economic development matter?," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 553-568, March.
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