Explaining cross-border bank expansion in East Africa

Odongo Kodongo, Dinah Natto and Nicholas Biekpe

Journal of International Financial Markets, Institutions and Money, 2015, vol. 36, issue C, 71-84

Abstract: This paper investigates the drivers of bank foreign expansion in East Africa. Our results support the view that institutional quality is vital at the planning phase of banks’ going-abroad decision but its importance is muted once the decision has been taken. Second, relatively competitive markets and weak market power at home seem to “push” banks abroad. Third, banks seek to exploit the benefits of their relative efficiency through regional expansion. Fourth, relatively higher foreign country inflation is a deterrent to banks expansion abroad. Finally, desire for greater earnings, economic integration, and follow-the-client hypothesis do not explain banks’ foreign expansion decisions.

Keywords: East Africa; Foreign bank expansion; Internationalization theories; Poisson regression (search for similar items in EconPapers)
JEL-codes: F23 G15 G21 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:36:y:2015:i:c:p:71-84

DOI: 10.1016/j.intfin.2014.12.005

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