Drivers of Cross-Border Banking in Sub-Saharan Africa

46 Pages Posted: 7 Aug 2019

See all articles by Paul Mathieu

Paul Mathieu

International Monetary Fund (IMF)

Marco Pani

International Monetary Fund (IMF) - Middle East and Central Asia Department

Shiyuan Chen

International Monetary Fund (IMF)

Rodolfo Maino

International Monetary Fund (IMF)

Date Written: July 2019

Abstract

Using data collected from pan-African banks' (PABs), balance sheets and other sources (Orbis, Fitch), this study identifies some key patterns of cross-border investment in bank subsidiaries by key banking groups in sub-Saharan Africa (SSA) and discusses some of the determinants of this investment. Using a gravity model relating the annual value of a banking group's investment in the net equity of its subsidiaries to a set of explanatory variables, the analysis finds that cross-border banking is in part driven by a search for yield, diversification, and expansion for strategic reasons.

Keywords: Economic integration, Financial statistics, Central banks, Price indexes, Banking systems, Cross-border banking flows, Bank leverage, Global banks, bank subsidiary, cross-border, pan-African, SSA, host country

JEL Classification: F32, F33, F34, E01, G21, O24, L31, G2

Suggested Citation

Mathieu, Paul and Pani, Marco and Chen, Shiyuan and Maino, Rodolfo, Drivers of Cross-Border Banking in Sub-Saharan Africa (July 2019). IMF Working Paper No. 19/146, Available at SSRN: https://ssrn.com/abstract=3433137

Paul Mathieu (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Marco Pani

International Monetary Fund (IMF) - Middle East and Central Asia Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Shiyuan Chen

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Rodolfo Maino

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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