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Title: Ethnic fractionalisation, governance and loan defaults in Africa
Authors: Andrianova, Svetlana
Baltagi, Badi H.
Demetriades, Panicos
Fielding, David
First Published: 8-Feb-2017
Publisher: Wiley on behalf of University of Oxford, Department of Economics
Citation: Oxford Bulletin of Economics and Statistics, 2017, in press
Abstract: We present a theoretical model of an imperfectly competitive loans market that is suitable for emerging economies in Africa. The model allows for variation in both the level of contract enforcement (the quality of governance) and the degree of market segmentation (the level of ethnic fractionalization). The model predicts a specific form of non-linearity in the effects of these variables on loan default. Empirical analysis using African panel data for 110 individual banks in 28 countries over 2000-2008 provides strong evidence for these predictions. Our results have important implications for the conditions under which policy reform will enhance financial development.
DOI Link: 10.1111/obes.12152
ISSN: 0305-9049
eISSN: 1468-0084
Embargo on file until: 8-Feb-2019
Version: Post-print
Status: Peer-reviewed
Type: Journal Article
Rights: Copyright © 2016 John Wiley & Sons, Inc. Deposited with reference to the publisher’s open access archiving policy.
Description: The file associated with this record is under a 24 month embargo from publication in accordance with the publisher's self-archiving policy. The full text may be available through the publisher links provided above.
Appears in Collections:Published Articles, Dept. of Economics

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