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

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

The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality

“…It is relevant to emphasise that a positive synergy is not consistent with the theoretical underpinnings of this study because a negative net effect on inequality is anticipated. Overall, these findings are consistent with those of Asongu et al (2017b) who concluded that credit registries broadly play their theoretical function of decreasing financing constraints, especially in the banking industry. This relaxation of financial constraints would facilitate access to credit by economic operators and households.…”

“…Results are presented in terms of net impacts, marginal effects and thresholds at which public credit registries and private credit bureaus modulate financial access in order to reduce inequality. The notion of threshold is consistent with recent literature (see Batuo, 2015;Asongu, 2017;Asongu et al, 2017b). This threshold is a critical mass at which the modulating effect of a policy variable completely neutralizes an undesired effect from the independent variable of interest, so that ultimately there is a combined theoretically anticipated effect on the outcome variable.…”

“…Fourth, the positioning of this inquiry diverges from the existing literature which has mainly centred on examining: the impact of information rights by creditors, the role of information asymmetry among creditors and the relationship between information asymmetry and financial development. The first strand has investigated the role of stronger creditor rights in inter alia: risk-taking by banks (Acharya et al, 2011;Houston et al, 2010); reducing market power in the banking industry (Asongu et al 2017b) and bankruptcy (Brockman & Unlu, 2009;Claessens & Klapper, 2005). The second strand of the literature which has focused on how information asymmetry among creditors: improves credit availability (Triki & Gajigo, 2014;Brown et al, 2009;Djankov et al, 2007); decreases costs of credits (Brown et al, 2009), reduces default rates (Jappelli & Pagano, 2002), influences syndicated bank loans (Tanjung et al, 2010;Ivashina, 2009) and affects corruption in lending procedures (Barth et al, 2009).…”

How enhancing gender inclusion affects inequality: Thresholds of complementary policies for sustainable development

“…Before concluding this paper, it is worthwhile to emphasise that the underlying conception of threshold is consistent with the attendant critical mass literature, notably, thresholds upon which growing environmental degradation has a negative incidence on inclusive development (Asongu, 2018), initial conditions for rewarding effects (Cummins, 2000), critical masses for favourable effects (Batuo, 2015; Roller & Waverman, 2001), and inflexion points at which information sharing reduces market power for the enhancement of financial access (Asongu, le Roux, & Tchamyou, 2019). An extended threshold analysis is used to assess critical masses at which further increasing gender inclusion enhances inequality.…”

Size, efficiency, market power, and economies of scale in the African banking sector

“…In this section, we discuss measures of market power and bank size, and indicators of efficiency and economies of scale. In the banking literature, market power is measured primarily with the Lerner index (Ariss 2010;Asongu et al 2018b). This indicator measures the extent to which a bank can set prices above its marginal costs.…”