33 research outputs found
Essential information sharing thresholds for reducing market power in financial access: A study of the African banking industry
This study investigates the role of information sharing offices (public credit registries and
private credit bureaus) in reducing market power for financial access in the African banking
industry. The empirical evidence is based on a panel of 162 banks from 42 countries for the
period 2001-2011. Three simultaneity-robust empirical strategies are employed, namely: (i)
Two Stage Least Squares with Fixed Effects in order to account for simultaneity and the
observed heterogeneity; (ii) Generalised Method of Moments (GMM) to control for
simultaneity and time-invariant omitted variables and (iii) Instrumental Variable Quantile
regressions to account for simultaneity and initial levels of financial access. In order to ensure
that information sharing offices influence market power for loan price (quantity) to decrease
(increase), public credit registries should have between 3.156% and 3.3% coverage, while
private credit bureaus should have between 1.443 and 18.4% coverage. The established
thresholds are cut-off points at which information sharing offices completely neutralise the
negative effect of market power on financial access. The thresholds are contingent on the
dimension (loan price versus loan quantity) and distribution (conditional mean versus
conditional distribution) of financial access
Pre- and Post-Crisis Dynamics of Financial Globalisation for Financial Development in Africa
This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004-2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent to financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. Policy implications are discussed