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

Léon, Florian

doi:10.1016/j.ribaf.2015.10.015

Cited by 43 publications

(23 citation statements)

References 22 publications

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“…Only three foreign banks were licensed to operate in Nigeria, occupying the 12th, 14th and 19th places in the list. Not only has foreign presence in Nigeria banking industry been small, it had also declined over time, in contrast to the trend in the rest of SSA and globally (Barth et al, 2013;Beck et al, 2014;KPMG, 2015;Léon, 2016). Foreign banks, as well as regional ones, including those with extensive activity elsewhere in Africa, are either not present in Nigeria or have only small activity (Appendices 1 and 2).…”

Section: The Theoretical Puzzle That Motivated the Studymentioning

confidence: 99%

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Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Nachum

Ogbechie

2019

Africa Journal of Management

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Privately-owned Nigerian banks hold 94% of Nigeria banking assets, the world's second largest share of local ownership. Theoretical explanations for the dominance of local firms related to liabilities of foreignness do not explain this phenomenon, as foreign banks do not experience additional costs compared to local Nigerian banks. In search for explanation, we focus on market structure, competitive intensity and their impact on capability development. In-depth exploratory study of Nigeria banking industry, based on interviews with industry experts and practitioners, supplemented by secondary data, suggests that government policies towards both foreign and Nigerian banks resulted in market structure and competitive dynamics that were conducive to capability development by Nigeria banks, whose strength arrested foreign entry. The study throws light on a regulatory approach that incentivizes capability development via discipline imposed by markets rather than by direct government intervention in the form of protectionism or favorable resource provision. It highlights the merits of studying phenomena that are inconsistent with existing theories for theory extension and development.

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Section: The Theoretical Puzzle That Motivated the Studymentioning

confidence: 99%

“…The H-statistics measures the impact of changes in input prices, and subsequent changes in marginal costs, on firms' revenues. The Lerner index demonstrates firms' ability to set prices over marginal costs as an indication of their market power (Léon, 2016;Liu, Molyneux, & Wilson, 2013).…”

Section: Market Structure Competitive Dynamics and The Capabilitiesmentioning

confidence: 99%

Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Nachum

Ogbechie

2019

Africa Journal of Management

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“…In his investigation of bank competition in seven Western African countries, Léon (2016) shows that competition has increased over the period 2002-2009 coinciding with the rapid expansion of African banking groups and the relative decline of incumbent foreign banks from developed countries. Beck (2015) examines the impact of cross-border banking on access to finance for firms using data on 29 African countries.…”

Section: Cross-border Banking In Africamentioning

confidence: 99%

“…First, we help understanding the implications of the expansion of PABs which are still understudied. Few studies have been done to examine how the development of PABs can influence African banking systems, exceptions being Kodongo, Natto and Biekpe (2015) on the drivers of cross-border bank expansion in East Africa,Beck (2015) on the impact of the forms of foreign banks on access to finance for firms in Africa and Léon (2016) on the link between PABs and bank competition in the WAEMU region. By providing the first study on the efficiency impact of PABs, we bring information for policymakers to favor or discourage this expansion.…”

Section: Introductionmentioning

confidence: 99%

Do Pan-African banks have the best of both worlds?

Zins

Weill

2018

Economic Systems

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There has been a large expansion of foreign banks in Africa over the two decades with Pan-African banks playing a key role in this phenomenon. This paper questions if this development is beneficial for bank efficiency in African countries by investigating if Pan-African banks are more efficient than other types of foreign banks and domestic banks. We analyze the relation between ownership type and bank efficiency on a large sample of African banks covering 39 African countries over the period 2002-2015. We find that Pan-African banks are the most efficient banks in African banking industries. We explain this finding by the fact that these banks combine the best of both worlds: they have the global advantages of foreign banks and the home field advantages of domestic banks. They are then able to be more efficient than foreign banks from developed countries but also than domestic banks. This suggests that favoring entry of Pan-African banks would be beneficial to bank efficiency in Africa.JEL Codes: G21, G32, N27.

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“…Some laudable attempts have been made recently to advance our understanding of the implications of cross-border banking but not necessarily the accounting informativeness of it. For instance, Sissy et al (2017) advance the literature on the impact of cross-border banking on risk and return in the African banking industry; Agbloyor et al (2012) assess the effects of cross-border mergers and acquisitions (M&As) on banking sector development in Africa; Gulamhussen et al (2016) examine the drivers of cross-border M&As among commercial banks; Figuet et al (2015) investigate the effects of Basel III on cross-border banking claims; Léon (2016) studies the link between cross-border banking and competitive behaviour of banks while Kleimeier et al (2013) assess the transmission of financial crises via cross-border banking. 1 Another research gap in the banking literature lies in the link between institutional factors and the quality of accounting information especially within the context of cross-border banking.…”

Section: Introductionmentioning

confidence: 99%

The effects of cross-border banking and institutional quality on accounting information of banks in Africa

Amidu

Sissy

Issahaku

2017

IJEA

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This paper seeks to analyse the implications of cross-border banking and institutional quality for accounting information quality. We sample 330 banks across 29 African countries and employ system GMM estimator as a methodological approach to test for two related hypotheses. First, banks financial statements are prepared on the basis of international accounting standards as banks cross-border when national institutions are strengthened. We build on these results and employ various specifications of institutional quality; the second test suggests that the relative quality of accounting information among banks in Africa during the period, 2002-2013, is attributed to cross-border banking, larger market share and the level of transparency.

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

Cited by 43 publications

References 22 publications

Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Where have foreign banks in Nigeria gone? Market structure, competitive intensity and the capabilities of Nigeria banks

Do Pan-African banks have the best of both worlds?

The effects of cross-border banking and institutional quality on accounting information of banks in Africa

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