Does cross-border banking enhance competition and cost efficiency? Evidence from Africa

IF 2.9 3区经济学 Q2 BUSINESS, FINANCE

Journal of Multinational Financial Management Pub Date : 2021-12-01 DOI:10.1016/j.mulfin.2021.100695

Luc Matabaro Borauzima , Dominique Niyondiko , Aline Muller

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Abstract

Over the last two decades, the unprecedented expansion of cross-border banking on the African banking market has raised concern about their effects on host countries’ markets. This paper investigates to what extent this expansion has affected competition and cost efficiency in the African banking market using a sample of 429 active commercial banks from 2000 to 2015. Results show that CBB activities enhance competition, mainly driven by African CBB. At the regional scale, these effects are more substantial in Sub-Saharan Africa (SSA) because African CBBs have more expanded their activities in SSA. We also document that more efficient banks alleviate the competition induced by the expansion of African CBBs. The latter exhibit lower efficiency and therefore do not encourage bank efficiency. This study further shows that macroeconomic conditions and institutional variables are essential drivers of bank competition and cost efficiency in Africa. These results are robust to alternative estimation techniques (system-GMM, Quantile regression-Adaptative MCMC, Matching) and proxies of competition and cost efficiency.

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跨境银行业务是否提高了竞争和成本效率?来自非洲的证据

过去二十年来，非洲银行市场上跨境银行业务的空前扩张引起了人们对其对东道国市场影响的担忧。本文利用2000年至2015年429家活跃商业银行的样本，调查了这种扩张在多大程度上影响了非洲银行市场的竞争和成本效率。研究结果表明，以非洲为主导的CBB活动增强了竞争。在区域范围内，这些影响在撒哈拉以南非洲(SSA)更为显著，因为非洲CBBs在SSA的活动范围更广。我们还证明，效率更高的银行缓解了非洲央行扩张所引发的竞争。后者表现出较低的效率，因此不能促进银行效率。这项研究进一步表明，宏观经济条件和制度变量是非洲银行竞争和成本效率的重要驱动因素。这些结果对替代估计技术(系统- gmm，分位数回归-自适应MCMC，匹配)和竞争和成本效率代理具有鲁棒性。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of Multinational Financial Management BUSINESS, FINANCE-

CiteScore

7.30

自引率

4.80%

发文量

审稿时长

30 days

期刊介绍： International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.