Information Asymmetry and Market Power in the African Banking Industry

By Agyenim Boateng, Simplice A. Asongu, R. Akamavi, Vanessa S. Tchamyou. 2017

310 citations recorded by the source corpus.

This study assesses how market power in the African banking industry is affected by the complementarity between information sharing offices and information and communication technology (ICT). The empirical evidence is based on a panel of 162 banks consisting of 42 countries for the period 2001–2011. Three estimation techniques are employed, namely: (i) instrumental variable Fixed effects to control for the unobserved heterogeneity; (ii) Tobit regressions to control for the limited range in the dependent variable; and (iii) Instrumental Quantile Regressions (QR) to account for initial levels of market power. Whereas results from Fixed effects and Tobit regressions are not significant, with QR: (i) the interaction between internet penetration and public credit registries reduces market power in the 75th quartile and (ii) the interaction between mobile phone penetration and private credit bureaus increases market power in the top quantiles. Fortunately, the positive net effects are associated with negative marginal effects from the interaction between private credit bureaus and mobile phone penetration. This implies that mobile phones could complement private credit bureaus to decrease market power when certain thresholds of mobile phone penetration are attained. These thresholds are computed and discussed.

Subfields: Accounting, Economics and Econometrics, Information Systems

View Paper: https://www.semanticscholar.org/paper/bc722425659f10a3083f5a32fb81546125868f4c

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Citations in the corpus

The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality (2019, background): “It has been acknowledged in recent literature (see Asongu & Nwachukwu, 2016; Boateng et al., 2018; Tchamyou & Asongu, 2017) that all explanatory variables are supposed to be predetermined (or suspected endogenous) whereas only time invariant omitted variables are considered as strictly exogenous.”
Mobile phones, institutional quality and entrepreneurship in Sub-Saharan Africa (2017, methodology): “In this study, we opt for the Roodman (2009ab) extension of Arellano and Bover (1995) because it has been documented to restrict the proliferation of instruments and control for dependence among cross-sections (see Love & Zicchino, 2006; Baltagi, 2008; Boateng et al., 2016).”
Environmental degradation and inclusive human development in sub-Saharan Africa (2018, unknown): “identification strategy has been recently adopted in the literature (Boateng et al., 2018; Asongu & Nwachukwu, 2016a; Tchamyou & Asongu, 2017).”
Enhancing governance for environmental sustainability in sub-Saharan Africa (2020, unknown): “Cognizant of developments in the application of the GMM strategy, the Arellano and Bover (1995) extension of Roodman (2009a, 2009b) is adopted because it has been established in recent literature to reduce the proliferation of instruments (Asongu and Nwachukwu, 2016b; Boateng et al., 2018; Tchamyou ”