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African Economic and Monetary Union (WAEMU)

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  • Sandrine Kablan

Abstract

This paper measures the efficiency of WAEMU banks and its determining factors, after the banking system reforms from 1993 to 1996. Data envelopment analysis (DEA) was used for assessing technical efficiency and a stochastic frontier analysis (SFA) for cost efficiency. Results suggest similar evolutions for the two types of efficiency for all WAEMU countries except Côte d’Ivoire and Burkina Faso. A detailed analysis per banking shareholder’s equity group reveals that local private banks are the most efficient ones, followed by foreign and then state-owned banks. Despite the technological changes that occurred in the banking system, the Malmquist index shows that the increase of technical efficiency is much more a factor of scale efficiency change than of the incorporation of technological innovations. Lastly, WAEMU banks’ efficiency is sensitive to variables like financial soundness, the ratio of bad loans per country, the banking concentration and the GDP per capita.

Suggested Citation

  • Sandrine Kablan, 2009. "African Economic and Monetary Union (WAEMU)," Research Papers RP_192, African Economic Research Consortium.
  • Handle: RePEc:aer:rpaper:rp_192
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    File URL: http://www.aercafrica.org/documents/RP192.pdf
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    Cited by:

    1. Patrick Mumo Muinde & James Mwangi Karanja, 2017. "Kenya Commercial Banks are Star Performers: Myth or Truth? Exploratory Empirical Evidence from Nairobi Securities Exchange," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 340-350.
    2. KABLAN, Sandrine, 2012. "Microfinance efficiency in the West African Economic and Monetary Union: have reforms promoted sustainability or outreach?," MPRA Paper 39955, University Library of Munich, Germany.
    3. Leadaut Edith Prisca Togba, 2016. "Analysis of the Cost-Efficiency of Microfinance Institutions in the West African Economic Monetary Union Area," Research Papers RP_324, African Economic Research Consortium.
    4. repec:kap:ecopln:v:51:y:2018:i:1:d:10.1007_s10644-016-9200-3 is not listed on IDEAS
    5. Edward Gardener & Philip Molyneux & Hoai Nguyen-Linh, 2010. "Determinants of efficiency in South East Asian banking," The Service Industries Journal, Taylor & Francis Journals, vol. 31(16), pages 2693-2719, July.

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