The effects of cross-border banking and institutional quality on accounting information of banks in Africa

Abstract

This paper seeks to analyse the implications of cross-border banking and institutional quality for accounting information quality. We sample 330 banks across 29 African countries and employ system GMM estimator as a methodological approach to test for two related hypotheses. First, banks financial statements are prepared on the basis of international accounting standards as banks cross-border when national institutions are strengthened. We build on these results and employ various specifications of institutional quality; the second test suggests that the relative quality of accounting information among banks in Africa during the period, 2002-2013, is attributed to cross-border banking, larger market share and the level of transparency.