Do Pan-African Banks Have the Best of Both Worlds?

Alexandra Zins and Laurent Weill
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Alexandra Zins: LaRGE Research Center, Université de Strasbourg

Working Papers of LaRGE Research Center from Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg

Abstract: There has been a large expansion of foreign banks in Africa over the two decades with Pan-African banks playing a key role in this phenomenon. This paper questions if this development is beneficial for bank efficiency in African countries by investigating if Pan-African banks are more efficient than other types of foreign banks and domestic banks. We analyze the relation between ownership type and bank efficiency on a large sample of African banks covering 39 African countries over the period 2002-2015. We find that Pan-African banks are the most efficient banks in African banking industries. We explain this finding by the fact that these banks combine the best of both worlds: they have the global advantages of foreign banks and the home field advantages of domestic banks. They are then able to be more efficient than foreign banks from developed countries but also than domestic banks. This suggests that favoring entry of Pan-African banks would be beneficial to bank efficiency in Africa.

Keywords: Africa; bank; efficiency; ownership. (search for similar items in EconPapers)
JEL-codes: G21 G32 N27 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-afr and nep-ban
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Do Pan-African banks have the best of both worlds? (2018)
Working Paper: Do Pan-African banks have the best of both worlds? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:lar:wpaper:2017-05

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