Drivers of Cross-Border Banking in Sub-Saharan Africa

Paul Mathieu, Marco Pani, Shiyuan Chen and Rodolfo Maino

No 2019/146, IMF Working Papers from International Monetary Fund

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: WP; break; center; exchange rate; Cross-border banking flows; Bank leverage; Global banks; Group profitability; banking group variable; Group size; vis-à-vis intra-group; net equity; host country pair; bank subsidiary; pan-African banking groups; Exchange rates; Cross-border banking; Inflation; Stocks; Gravity models; Africa; Sub-Saharan Africa; Global; West Africa; North Africa (search for similar items in EconPapers)
Pages: 45
Date: 2019-07-11
New Economics Papers: this item is included in nep-ban
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Citations: View citations in EconPapers (1)

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