 Ownership and bank efficiency in Africa: True fixed effects stochastic frontier analysisSamuel Mutarindwa, Ibrahim Siraj and Andreas Stephan Journal of Financial Stability, 2021, vol. 54, issue C Abstract: This paper investigates the effects of ownership patterns on banks’ cost and profit efficiencies taking a sample of 607 commercial banks operating in 53 African countries during the period 2005–2015. Using pooled and modified true fixed effects (TFE) stochastic frontier panel approaches, we obtain two principal results. First, foreign-owned banks are not more profit or cost efficient than their domestic peers. Second, privately owned banks outperform state-owned banks. These findings result not only from bank-level inefficiencies but are explained by bank-level characteristics and macroeconomic conditions. Specifically, larger, older, and listed banks are associated with higher profit efficiency. This study also reveals that ownership concentration (blockholding) has adverse effects on the efficiency of banks. Keywords: Ownership; Blockholding; Efficiency; Stochastic frontier analysis; Fixed effects (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:54:y:2021:i:c:s1572308921000462 DOI: 10.1016/j.jfs.2021.100886 Access Statistics for this article Journal of Financial Stability is currently edited by I. Hasan, W. C. Hunter and G. G. Kaufman More articles in Journal of Financial Stability from Elsevier |
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