The African Credit Trap

Preprint OPEN
Svetlana Andrianova ; Badi H. Baltagi ; Panicos O. Demetriades ; David Fielding (2010)
  • Subject: Dynamic panel data; African financial under-development; African credit markets | Dynamic panel data, African financial under-development, African credit markets
    • jel: jel:O16 | jel:G21
    mesheuropmc: education | health care economics and organizations

We put forward a plausible explanation of African financial underdevelopment in the form of a bad credit market equilibrium. Utilising an appropriately modified IO model of banking, we show that the root of the problem could be unchecked moral hazard (strategic loan def... View more
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