Bank market power, ownership, regional presence and revenue diversification: Evidence from Africa

My Nguyen, Shrimal Perera and Michael Skully

Emerging Markets Review, 2016, vol. 27, issue C, 36-62

Abstract: We provide the first evidence that African banks with greater market power in lending and deposit markets earn more from non-traditional activities. This is consistent with dominant banks' ability to identify better non-traditional opportunities and utilize their greater bargaining capacity in contract creation. Non-African-owned banks are found to exploit non-traditional banking and earn higher non-interest income. In contrast, African banks in other African countries focus more on traditional financial intermediation. Our findings are important to other emerging markets because their banks are traditionally focused on financial intermediation and regulations and supervision in relation to non-traditional activities are relatively less developed.

Keywords: Bank market power; Non-interest income; Bank ownership; Africa; Lerner index (search for similar items in EconPapers)
JEL-codes: C33 G21 G28 O23 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:27:y:2016:i:c:p:36-62

DOI: 10.1016/j.ememar.2016.03.001

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