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Ethnic fractionalisation, governance and loan defaults in Africa

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journal contribution
posted on 12.10.2016, 14:13 by Svetlana Andrianova, Badi H. Baltagi, Panicos Demetriades, David Fielding
We present a theoretical model of an imperfectly competitive loans market that is suitable for emerging economies in Africa. The model allows for variation in both the level of contract enforcement (the quality of governance) and the degree of market segmentation (the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on loan default. Empirical analysis using African panel data for 110 individual banks in 28 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development.

History

Citation

Oxford Bulletin of Economics and Statistics, 2017, in press

Author affiliation

/Organisation/COLLEGE OF SOCIAL SCIENCES, ARTS AND HUMANITIES/Department of Economics

Version

AM (Accepted Manuscript)

Published in

Oxford Bulletin of Economics and Statistics

Publisher

Wiley on behalf of University of Oxford, Department of Economics

issn

0305-9049

eissn

1468-0084

Acceptance date

11/07/2016

Copyright date

2016

Available date

08/02/2019

Publisher version

http://onlinelibrary.wiley.com/doi/10.1111/obes.12152/full

Notes

The file associated with this record is under a 24 month embargo from publication in accordance with the publisher's self-archiving policy. The full text may be available through the publisher links provided above.

Language

en

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