Banking Concentration and Women's Economic Empowerment in Developing Countries

The present study examines how bank concentration affects female economic inclusion in a panel of 80 developing countries based on data for the period 2000 to 2020. The study employs fixed effects regressions and the generalized method of moments (GMM) estimation techniques as empirical strategies. Two proxies of bank concentration are employed, notably: (i) total assets that are possessed by the three largest banks and (ii) total assets that are owned by the five largest banks. From the findings, women's economic empowerment is diminished by bank concentration due potentially to reduced financial access. However, compared to bank concentration with regard to the total assets owned by the three largest banks, bank concentration in terms of the total assets held by the five largest banks is linked to a larger negative magnitude. Hence, more competition and banks are necessary in the banking sector to enhance financial access and women’s economic empowerment. Policy implications are discussed in terms of increasing competition in the banking sector.