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Ownership and bank efficiency in Africa: True fixed effects stochastic frontier analysis
Univ Rwanda, Rwanda.
Long Isl Univ Post, USA.
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics. Jönköping University, Sweden.
2021 (English)In: Journal of Financial Stability, ISSN 1572-3089, E-ISSN 1878-0962, Vol. 54, article id 100886Article in journal (Refereed) Published
Abstract [en]

This paper investigates the effects of ownership patterns on banks & rsquo; cost and profit efficiencies taking a sample of 607 commercial banks operating in 53 African countries during the period 2005 & ndash;2015. Using pooled and modified true fixed effects (TFE) stochastic frontier panel approaches, we obtain two principal results. First, foreign-owned banks are not more profit or cost efficient than their domestic peers. Second, privately owned banks outperform state-owned banks. These findings result not only from bank-level inefficiencies but are explained by bank-level characteristics and macroeconomic conditions. Specifically, larger, older, and listed banks are associated with higher profit efficiency. This study also reveals that ownership concentration (blockholding) has adverse effects on the efficiency of banks. (c) 2021 The Author(s). Published by Elsevier B.V. CC_BY_4.0

Place, publisher, year, edition, pages
Elsevier, 2021. Vol. 54, article id 100886
Keywords [en]
Ownership, Blockholding, Efficiency, Stochastic frontier analysis, Fixed effects
National Category
Economics
Research subject
Economy, Economics
Identifiers
URN: urn:nbn:se:lnu:diva-105999DOI: 10.1016/j.jfs.2021.100886ISI: 000670127500003Scopus ID: 2-s2.0-85107819511Local ID: 2021OAI: oai:DiVA.org:lnu-105999DiVA, id: diva2:1581597
Available from: 2021-07-22 Created: 2021-07-22 Last updated: 2021-11-26Bibliographically approved

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Stephan, Andreas

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