Bank Efficiency and Openness in Africa: Do Income Levels Matter?
Simplice Asongu ()
The Review of Finance and Banking, 2012, vol. 04, issue 2, 115-122
The business of this study is to investigate the role of openness in bank efficiency with respect to income levels. From a panel of 29 low and middle income African countries with data spanning from 1987 to 2008, we provide evidence that, openness (trade and financial) breeds less bank efficiency in low income countries. As for middle income countries, while financial openness has the same effect, results for trade openness are not significant. These findings justify the absence of a banking comparative advantage and consequently, the issue of over-liquidity resulting from low funding of credits by deposits. For policy implications, openness will increase the economic cost of banks in sampled countries. However, trade openness will be more detrimental than financial openness. More so, banks in middle income countries play a greater role in financing activities resulting from trade openness than those in low income countries.
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (12) Track citations by RSS feed
Downloads: (external link)
http://www.rfb.ase.ro/articole/Article3.pdf Full text (application/pdf)
Working Paper: Bank Efficiency and Openness in Africa: Do Income Levels Matter? (2011)
Working Paper: Bank efficiency and openness in Africa: do income levels matter? (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:rfb:journl:v:04:y:2012:i:3:p:115-122
Access Statistics for this article
The Review of Finance and Banking is currently edited by Victor Dragota; Bogdan Negrea
More articles in The Review of Finance and Banking from Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante Strada Mihai Eminescu nr.13-15, sector 1, Bucuresti, Romania. Contact information at EDIRC.
Series data maintained by Tatu Lucian ().