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INFORMATION, INSTITUTIONS, AND BANKING SECTOR DEVELOPMENT IN WEST AFRICA
Author(s) -
DEMETRIADES PANICOS,
FIELDING DAVID
Publication year - 2012
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2011.00376.x
Subject(s) - loan , non performing loan , corporate governance , financial system , business , panel data , government (linguistics) , asset quality , economics , private sector , interest rate , finance , monetary economics , capital adequacy ratio , economic growth , incentive , market economy , linguistics , philosophy , econometrics
Using a new West African panel data set, we provide evidence on the determinants of individual banks' loans and assets in some of the poorest countries in the world. Higher loan default rates reduce both the loans to assets ratio and the volume of assets. However, the size of these effects is sensitive to bank age and ownership structure. Younger, private, domestically owned banks are most affected, suggesting that such banks face the most severe informational disadvantages. Very old government‐owned banks benefit from high default rates. We also explore how the quality of governance impacts on loans and assets. ( JEL G21, O16)