Ethnic Fractionalization, Governance and Loan Defaults in Africa
Copyright policy )Ethnic Fractionalization, Governance and Loan Defaults in Africa
AbstractWe 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 nonlinearity in the effects of these variables on loan default. Empirical analysis using African panel data for 110 individual banks in 28 countries over 2000–08 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development.
Ethnic fractionalization, Governance, African Banks, Financial development, financial development, ddc:330, African banks, Ethnic fractionalization, Governance, Financial development, African Banks, Panel data., O16, ethnic fractionalization, panel data, Global Development Institute, governance, ResearchInstitutes_Networks_Beacons/global_development_institute; name=Global Development Institute, Ethnic fractionalization, Governance, Financial development, African Banks, Panel data, ethnic fractionalization, governance, financial development, African banks, panel data, G21, Ethnic fractionalization; Governance; Financial development; African Banks; Panel data, Panel data, jel: jel:G21, jel: jel:O16
Ethnic fractionalization, Governance, African Banks, Financial development, financial development, ddc:330, African banks, Ethnic fractionalization, Governance, Financial development, African Banks, Panel data., O16, ethnic fractionalization, panel data, Global Development Institute, governance, ResearchInstitutes_Networks_Beacons/global_development_institute; name=Global Development Institute, Ethnic fractionalization, Governance, Financial development, African Banks, Panel data, ethnic fractionalization, governance, financial development, African banks, panel data, G21, Ethnic fractionalization; Governance; Financial development; African Banks; Panel data, Panel data, jel: jel:G21, jel: jel:O16
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