Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector

GIGA Working Paper No. 165

30 Pages Posted: 4 May 2011 Last revised: 17 Aug 2012

See all articles by Birte Pohl

Birte Pohl

affiliation not provided to SSRN

Date Written: April 30, 2011

Abstract

This paper examines the efficiency effects of foreign bank entry on domestic banks in sub-Saharan Africa during the period 1999-2006. Using a recently compiled dataset on foreign bank presence, the competition and spillover effects of North-South, regional and nonregional South-South banks are distinguished. The results show that the competitive pressure on domestic banksʹ net interest margins emanates only from regional South-South banks. There is evidence of spillover effects from North-South and regional South-South banks on domestic banks. As domestic banks invest in foreign technologies, their overhead costs increase in the short-run. Non-regional South-South banks seem to have little effect on the efficiency of domestic banks.

Keywords: sub-Saharan Africa, efficiency, South-South banks, spillover

JEL Classification: F21, F23, F36

Suggested Citation

Pohl, Birte, Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector (April 30, 2011). GIGA Working Paper No. 165, Available at SSRN: https://ssrn.com/abstract=1828726 or http://dx.doi.org/10.2139/ssrn.1828726

Birte Pohl (Contact Author)

affiliation not provided to SSRN ( email )

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

Paper statistics

Downloads
96
Abstract Views
861
Rank
489,152
PlumX Metrics