Bank Business Models in MENA and African Countries: The Relevance of Contextual Variables

Rym Ayadi, Paola Bongini, Barbara Casu and Doriana Cucinelli

Review of Corporate Finance, 2023, vol. 3, issue 3, 329-359

Abstract: Using a large sample of banks from the Middle East and North Africa (MENA), and African countries, we identify bank business models in the region. We use an Activity-Funding Approach (AFA) and cluster analysis, and we uncover a range of diverse business models heterogeneously distributed across countries. We then evaluate business model change between 2010 and 2019, a turbulent time in many of our sample countries. We find a high persistence of bank business models. Finally, we consider the determinants of bank business models, including bank-specific and macroeconomic factors, and the internationalisation of banks in the region. We find that country-specific characteristics play a crucial role in influencing banks’ choices. Regardless of the country of origin, foreign banks are more likely to diversify their assets and less likely to focus on lending than domestic banks.

Keywords: Business models; banks; MENA region (search for similar items in EconPapers)
JEL-codes: G21 O55 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlrcf:114.00000043

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