IDEAS home Printed from https://ideas.repec.org/a/ris/integr/0828.html
   My bibliography  Save this article

Financial Integration, Competition and Bank Risk-Taking Behavior: Evidence from Africa’s Sub-Regional Markets

Author

Listed:
  • Banyen, Kannyiri

    (Simon Diedong Dombo University of Business and Integrated Development Studies)

Abstract

Financial integration is generally associated with the development of synergies through cross-border banking and investment activities and increased competitiveness among banks. This paper examines the effects of shifts in financial freedom and competition on bank risk-taking behavior using data from 405 banks in 47 African countries across five regional economic communities from 2007-2014. The core findings suggest that financial integration directly increases bank risk-taking behavior in Africa through rising competition. The results also support an inverted U-shaped relationship between competition and bank risk-taking behavior. However, disparities in the results across sub-regional markets suggest that financial integration policies must be tailored to suit the market characteristics of each regional bloc. Overall, the study identifies deficiencies in competitiveness as a fundamental variable that hinders banks’ ability to benefit from the opportunity of stability offered by financial integration in emerging economies.

Suggested Citation

  • Banyen, Kannyiri, 2021. "Financial Integration, Competition and Bank Risk-Taking Behavior: Evidence from Africa’s Sub-Regional Markets," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 36(2), pages 282-307.
    • Handle: RePEc:ris:integr:0828
    as

    Download full text from publisher

    File URL: https://www.e-jei.org
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Financial Integration; Bank Competition; Risk-Taking Behavior; Africa;
    All these keywords.

    JEL classification:

    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F65 - International Economics - - Economic Impacts of Globalization - - - Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • N27 - Economic History - - Financial Markets and Institutions - - - Africa; Oceania

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:integr:0828. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yunhoe Kim (email available below). General contact details of provider: https://edirc.repec.org/data/desejkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.