Bank performance and real sector productivity in East Africa

Odongo Kodongo

No 77, KBA Centre for Research on Financial Markets and Policy Working Paper Series from Kenya Bankers Association (KBA)

Abstract: This paper sought to establish the linkages between bank performance and real sector productivity. We use data for five East African countries (Ethiopia, Kenya, Rwanda, Tanzania, and Uganda) for the period 2014-2022. We initially deploy the traditional panel fixed effects regression and subsequently the instrument variable fixed effects estimation for robustness checks. Our results show a robust negative nexus between banking sector performance and real sector productivity. Second, we find that noninterest charges is the major channel of transmission of adverse effects from the banking sector to real sectors such as manufacturing, while the interest channel tends to transmit positive effects especially to the services sector. Based on these findings, we make several policy recommendations.

Keywords: Real sector productivity; sectoral value-added; bank profitability; cost efficiency; East Africa (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-afr, nep-eff and nep-fdg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/297986/1/1890861502.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:kbawps:297986

Access Statistics for this paper

More papers in KBA Centre for Research on Financial Markets and Policy Working Paper Series from Kenya Bankers Association (KBA)
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().