Fresh Patterns of Liberalization, Bank Return and Return Uncertainty in Africa

In Challenges to Financial Stability –Perspective, Models and Policies (Volume 1: A Framework for Modeling Systemic Risk Drivers of Different Markets) Ed. Renata Karkowska (Chapter 6), pp. 121-143. (August, 2015). ASER Publishing and Thomson Reuters.

32 Pages Posted: 11 Sep 2014 Last revised: 5 Aug 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: January 8, 2014

Abstract

This chapter complements exiting African liberalization literature by providing fresh patterns of two main areas. First, it assesses whether African banking institutions have benefited from liberalization policies in terms of bank returns. Second, it models bank return and return uncertainty in the context of openness policies to examine fresh patterns for the feasibility of common policy initiatives. The empirical evidence is based on 28 African countries for the period 1999-2010. Varying non-overlapping intervals and autoregressive orders are employed for robustness purposes. The findings show that, while trade openness has increased bank returns and return uncertainties, financial openness and institutional liberalization have decreased bank returns and reduced return uncertainty respectively. But for some scanty evidence of convergence in return on equity, there is overwhelming absence of catch-up among sampled countries. Implications for regional integration and portfolio diversification are discussed.

Keywords: Liberalization policies; Capital return; Africa

JEL Classification: D6; F30; F41; F50; O55

Suggested Citation

Asongu, Simplice, Fresh Patterns of Liberalization, Bank Return and Return Uncertainty in Africa (January 8, 2014). In Challenges to Financial Stability –Perspective, Models and Policies (Volume 1: A Framework for Modeling Systemic Risk Drivers of Different Markets) Ed. Renata Karkowska (Chapter 6), pp. 121-143. (August, 2015). ASER Publishing and Thomson Reuters. , Available at SSRN: https://ssrn.com/abstract=2493415 or http://dx.doi.org/10.2139/ssrn.2493415

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
19
Abstract Views
431
PlumX Metrics