The Impact of Institutions on Bank Governance and Stability: Evidence from African Countries

Samuel Mutarindwa (), Dorothea Schäfer and Andreas Stephan

No 1739, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: This paper sheds new light on how African countries’ legal systems and institutions influence the governance and stability of their banks. We find that institutional factors, in particular the legal family of origin, political stability, contract enforcement and strength of investor protection promote central corporate governance reforms. Using a difference-in-difference approach, we also reveal that those reforms mediate the impact of institutions on banks. If countries have a corporate governance reform in place their banks show better internal governance and higher stability.

Keywords: African banks; corporate governance; legal systems; institutions; bank stability (search for similar items in EconPapers)
JEL-codes: G21 G28 G30 G32 G38 (search for similar items in EconPapers)
Pages: 29 p.
Date: 2018
New Economics Papers: this item is included in nep-afr, nep-ban, nep-cfn, nep-cta and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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