Are there Spatial Dependence Effects on Credit Distribution in a Monetary Union?

Abstract

This study investigates the effects of spatial autocorrelation on banking credit distribution in West African Economic and Monetary Union. We used spatial panel fixed effect techniques to make sure that the regional effects highlighted are independent of potential heterogeneity or effects of omitted variables within this monetary union. Also, we check for panel data unit root that allow for cross-sectional correlation due to the presence of international common factor. Our results underline the importance of spatial dependence effects in the estimation of credit distribution.panel data spatial autocorrelation, monetary union, banking intermediation, financial policies