Spillover and Competition Effects: Evidence from the Sub-Saharan African Banking Sector

Birte Pohl

No 66, Proceedings of the German Development Economics Conference, Berlin 2011 from Verein für Socialpolitik, Research Committee Development Economics

Abstract: This paper examines the efficiency effects of foreign bank entry on domestic banks in sub-Saharan Africa during the period 1999-2006. Using a recently compiled dataset on foreign bank presence, the competition and spillover effects of North-South, regional and nonregional South-South banks are distinguished. The results show that the competitive pressure on domestic banks' net interest margins emanates only from regional South-South banks. There is evidence of spillover effects from North-South and regional South-South banks on domestic banks. As domestic banks invest in foreign technologies, their overhead costs increase in the short-run. Non-regional South-South banks seem to have little effect on the efficiency of domestic banks.

Keywords: Sub-Saharan Africa; efficiency; South-South banks; spillover (search for similar items in EconPapers)
JEL-codes: F21 F23 F36 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-afr, nep-ban, nep-com and nep-eff
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:gdec11:66

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