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Journal of Banking Regulation

, Volume 20, Issue 1, pp 34–50 | Cite as

Essential information sharing thresholds for reducing market power in financial access: a study of the African banking industry

  • Simplice A. AsonguEmail author
  • Sara Le Roux
  • Vanessa S. Tchamyou
Original Article

Abstract

This study investigates the role of information sharing offices (public credit registries and private credit bureaus) in reducing market power for financial access in the African banking industry. The empirical evidence is based on a panel of 162 banks from 42 countries for the period 2001–2011. Three simultaneity-robust empirical strategies are employed, namely (1) Two Stage Least Squares with Fixed Effects in order to account for simultaneity and the unobserved heterogeneity, (2) Generalised Method of Moments to control for simultaneity and time-invariant omitted variables and (3) Instrumental Variable Quantile regressions to account for simultaneity and initial levels of financial access. In order to ensure that information sharing offices influence market power for loan price (quantity) to decrease (increase), public credit registries should have between 3.156% and 3.3% coverage, while private credit bureaus should have between 1.443 and 18.4% coverage. The established thresholds are cut-off points at which information sharing offices completely neutralise the negative effect of market power on financial access. The thresholds are contingent on the dimension (loan price versus loan quantity) and distribution (conditional mean versus conditional distribution) of financial access.

Keywords

Financial access Market power Information sharing 

JEL Classification

G20 G29 L96 O40 O50 

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Copyright information

© Macmillan Publishers Ltd., part of Springer Nature 2018

Authors and Affiliations

  • Simplice A. Asongu
    • 1
    • 2
    • 3
    Email author
  • Sara Le Roux
    • 1
  • Vanessa S. Tchamyou
    • 2
    • 4
  1. 1.Oxford Brookes Business School, Department of Accounting, Finance and EconomicsOxford Brookes UniversityOxfordUK
  2. 2.African Governance and Development InstituteYaoundéCameroon
  3. 3.Development Finance Centre, Graduate School of Business, University of Cape TownCape TownSouth Africa
  4. 4.Faculty of Applied EconomicsUniversity of AntwerpAntwerpBelgium

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