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

Simplice Asongu, Enowbi Batuo, Jacinta Nwachukwu, Vanessa Tchamyou

Research output: Contribution to journalArticle

20 Citations (Scopus)
8 Downloads (Pure)

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. First, from the Generalised Method of Moments 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 Quantile Regressions, 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 10th decile, 25th quartile and 90th decile 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 90th decile. Policy implications are discussed.
Original languageEnglish
Pages (from-to)88-104
Number of pages17
JournalJournal of Multinational Financial Management
Volume45
Early online date25 Apr 2018
DOIs
Publication statusPublished - Jun 2018

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Multinational Financial Management.
Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Multinational Financial Management (2018) DOI:10.1016/j.mulfin.2018.04.005

Keywords

  • Financial access
  • Market power
  • Information asymmetry
  • ICT
  • Africa

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