Is information diffusion a threat to market power for financial access? Insights from the African banking industry

Simplice Asongu, Enowbi Batuo (), Jacinta Nwachukwu () and Vanessa Tchamyou ()
Additional contact information
Enowbi Batuo: University of Westminster, UK
Jacinta Nwachukwu: Coventry University, UK

No 16/039, Research Africa Network Working Papers from Research Africa Network (RAN)

Abstract: This study assesses how information diffusion dampens the adverse effect of market power on the price and quantity of loans provided by a panel of 162 banks from 39 African countries for the period 2001-2011. The empirical evidence is based on three endogenity-robust estimation techniques, namely: (i) Two Stage Least Squares (2SLS), (ii) Generalised Method of Moments (GMM) and (iii) Instrumental Variable Quantile Regressions (QR). Three key results emerge. First, from the GMM results, a mobile phone penetration rate of 54.29, rising to 57 per 100 people are predicted to neutralise the adverse effect of market power on the average loan price and quantity respectively. Second, from the QR, mobile phone penetration rates of 56.20, 52.04 and 42.76 per 100 people is needed to nullify the negative effect of market power on loan quantity at the 0.10th, 0.25th and 0.90th quintiles respectively. Third, a considerably lower internet penetration rate of 9.49 per 100 people is required to counteract the negative impact of market power on loan quantity at the 0.90th quintile.

Keywords: Financial access; Market power; Information asymmetry; ICT; Africa (search for similar items in EconPapers)
JEL-codes: G20 G29 L96 O40 O55 (search for similar items in EconPapers)
Pages: 27
Date: 2016-10
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Published in: Journal of Multinational Financial Management, Volume 45, June 2018, Pages 88-104

Downloads: (external link)
http://publications.resanet.org/RePEc/abh/abh-wpap ... financial-access.pdf Revised version, 2016 (application/pdf)

Related works:
Journal Article: Is information diffusion a threat to market power for financial access? Insights from the African banking industry (2018)
Working Paper: Is information diffusion a threat to market power for financial access? Insights from the African banking industry (2016)
Working Paper: Is information diffusion a threat to market power for financial access? Insights from the African banking industry (2016)
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