Market Power and Bank Lending in Africa

The Role of Regulatory Policy

Bibliographic Data

ID21737534
AuthorsDaniel Ofori‐Sasu (0000-0001-8012-2478, University of Ghana, corresponding author), Elikplimi Komla Agbloyor (0000-0003-3945-5224, University of Ghana), Saint Kuttu (0000-0001-7165-2223, University of Ghana), Joshua Yindenaba Abor (0000-0002-3424-7760, University of Ghana)
Year2024
Volume25
Issue4
Pages600-633
Publication date2024-10-01
Peer ReviewedYes
Open AccessNo
TypeARTICLE
VenueJournal of African Business (JOURNAL)
Journal identifiersISSN: 1522-8916 • E-ISSN: 1522-9076
PublisherInforma UK Limited (PUBLISHER • GB)
DOI10.1080/15228916.2023.2227546
OpenAlexW4382068215
LanguageEN
References cited54

The paper investigates how regulatory policy modulates the complex relationship between market power and bank lending. The empirical evidence is based on the seemingly unrelated panel regressions by employing a dataset of 52 African countries for the period, 2006–2018. The study finds a U-shaped relationship between market power and bank lending. The study shows that the estimated thresholds fall within the range of -4.38 to 9.67 of market power. It observes that the thresholds of market power in countries with stringent regulatory policies are relatively greater than countries operating in low regulatory policy regimes. The study shows a negative and direct effect of market power on lending. In the light of interactions, the conditional effects are estimated to provide meaningful interpretations. This is relevant to policymakers because our established conditional effects, imply that regulatory policy is a sufficient complementary condition for reducing the negative effect of market power on bank lending

Econometrics · Economics · Market economy · Market power · Monetary economics · Panel data · Predictive power · Banking stability, regulation, efficiency · Economic Growth and Development · Islamic Finance and Banking Studies

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