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Does the expansion of regional cross-border banks affect competition in Africa? Indirect evidence

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  • Léon, Florian

Abstract

This article investigates how bank competition has evolved in Africa following the recent penetration and expansion of regional cross-border banks over the past decade. We examine changes in competition in the banking industry of seven African countries highly affected by this recent phenomenon. The evolution of competition is evaluated through three different non-structural measures of competition (Lerner index, Panzar–Rosse model, and Boone indicator). With the exception of results from the Lerner index, our findings show an intensification of competition since the mid-2000s. This period corresponds to the rapid expansion of regional cross-border banks in the zone, indicating that this expansion has promoted competition in banking sectors in Africa.

Suggested Citation

  • Léon, Florian, 2016. "Does the expansion of regional cross-border banks affect competition in Africa? Indirect evidence," Research in International Business and Finance, Elsevier, vol. 37(C), pages 66-77.
  • Handle: RePEc:eee:riibaf:v:37:y:2016:i:c:p:66-77
    DOI: 10.1016/j.ribaf.2015.10.015
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    More about this item

    Keywords

    Bank competition; Foreign banks; Africa; NEIO;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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