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 Verein für Socialpolitik, Research Committee Development Economics in its series Proceedings of the German Development Economics Conference, Berlin 2011 with number 66.
Date of creation: 2011
Date of revision:
Sub-Saharan Africa; efficiency; South-South banks; spillover;
Other versions of this item:
- Birte Pohl, 2011. "Spillover and Competition Effects: Evidence from the sub-Saharan African Banking Sector," GIGA Working Paper Series 165, GIGA German Institute of Global and Area Studies.
- 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-2011-07-27 (Africa)
- NEP-ALL-2011-07-27 (All new papers)
- NEP-BAN-2011-07-27 (Banking)
- NEP-COM-2011-07-27 (Industrial Competition)
- NEP-EFF-2011-07-27 (Efficiency & Productivity)
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