Differences in African Banking Systems: Causes and Consequences

Samuel Mutarindwa (), Dorothea Schäfer and Andreas Stephan

No 778, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper links banking system development to the colonial and legal history of African countries. Based on a sample of 40 African countries from 2000 to 2018, our empirical findings show a significant dependence of current financial institutions on the inherited legal origin and the colonization type. Findings also reveal that current financial legal institutions are not major determinants of banking system development, and that institutional development and governance quality are more important. A high share of government spending relative to GDP also positively affects banking system development in African countries.

Keywords: Legal origin; colonial history; financial institutions; banking system; correlated random effects model (search for similar items in EconPapers)
JEL-codes: G21 G38 G39 K15 K40 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-afr, nep-ban, nep-dev, nep-fdg and nep-his
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Journal Article: Differences in African banking systems: causes and consequences (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:778

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