AGDI currently has about 300 publications.
2019 |
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| 1. | Asongu, Nicholas Odhiambo Simplice M A Financial Innovation, 2019. Abstract | Links | BibTeX | Tags: Banks, Efficiency, Lending rates, Sub-Saharan Africa @article{Asongu_272, author = {Nicholas Odhiambo M Simplice A. Asongu}, url = {https://jfin-swufe.springeropen.com/articles/10.1186/s40854-019-0120-x?fbclid=IwAR2N7Ase_Ke0iLStgvnlqz9cNCIzyd3mYZkOo98P9Z8lLCEoM7ul-9CXbaI}, doi = {10.1186/s40854-019-0120-x}, year = {2019}, date = {2019-02-01}, journal = {Financial Innovation}, abstract = {There is a growing body of evidence that interest rate spreads in Africa are higher for big banks compared to small banks. One concern is that big banks might be using their market power to charge higher lending rates as they become larger, more efficient, and unchallenged. In contrast, several studies found that when bank size increases beyond certain thresholds, diseconomies of scale are introduced that lead to inefficiency. In that case, we also would expect to see widened interest margins. This study examines the connection between bank size and efficiency to understand whether that relationship is influenced by exploitation of market power or economies of scale. Using a panel of 162 African banks for 2001–2011, we analyzed the empirical data using instrumental variables and fixed effects regressions, with overlapping and non-overlapping thresholds for bank size. We found two key results. First, bank size increases bank interest rate margins with an inverted U-shaped nexus. Second, market power and economies of scale do not increase or decrease the interest rate margins significantly. The main policy implication is that interest rate margins cannot be elucidated by either market power or economies of scale. Other implications are discussed.}, keywords = {Banks, Efficiency, Lending rates, Sub-Saharan Africa}, pubstate = {published}, tppubtype = {article} } There is a growing body of evidence that interest rate spreads in Africa are higher for big banks compared to small banks. One concern is that big banks might be using their market power to charge higher lending rates as they become larger, more efficient, and unchallenged. In contrast, several studies found that when bank size increases beyond certain thresholds, diseconomies of scale are introduced that lead to inefficiency. In that case, we also would expect to see widened interest margins. This study examines the connection between bank size and efficiency to understand whether that relationship is influenced by exploitation of market power or economies of scale. Using a panel of 162 African banks for 2001–2011, we analyzed the empirical data using instrumental variables and fixed effects regressions, with overlapping and non-overlapping thresholds for bank size. We found two key results. First, bank size increases bank interest rate margins with an inverted U-shaped nexus. Second, market power and economies of scale do not increase or decrease the interest rate margins significantly. The main policy implication is that interest rate margins cannot be elucidated by either market power or economies of scale. Other implications are discussed. |
2013 |
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| 2. | Asongu, Simplice A Qualitative Research in Financial Markets, 5 (1), pp. 65 - 84, 2013. Abstract | Links | BibTeX | Tags: Banks, Disclosure, Liquidity, Post‐crisis, Risk management @article{Asongu_764, author = {Simplice A Asongu}, url = {http://dx.doi.org/10.1108/17554171311308968}, doi = {10.1108/17554171311308968}, year = {2013}, date = {2013-03-13}, journal = {Qualitative Research in Financial Markets}, volume = {5}, number = {1}, pages = {65 - 84}, abstract = {Purpose – The purpose of this paper is to investigate post‐crisis measures banks have adopted in a bid to manage liquidity risk. It is based on the fact that the financial liquidity market was greatly affected during the recent economic turmoil and financial meltdown. During the crisis, liquidity risk management disclosure was crucial for confidence building in market participants. Design/methodology/approach – The study investigates if Basel II pillar 3 disclosures on liquidity risk management are applied by 20 of top 33 world banks. Bank selection is based on information availability, geographic balance and comprehensiveness of the language in which information is provided. This information is searched from the World Wide Web, with a minimum of one hour allocated to “content search”, and indefinite time for “content analyses”. Such content scrutiny is guided by 16 disclosure principles classified in four main categories. Findings – Only 25 per cent of sampled banks provide publicly accessible liquidity risk management information, a clear indication that in the post‐crisis era, many top ranking banks still do not take Basel disclosure norms seriously, especially the February 2008 pre‐crisis warning by the Basel Committee on Banking Supervision. Research limitations/implications – Bank stakeholders should easily have access to information on liquidity risk management. Banks falling‐short of making such information available might not inspire confidence in market participants in events of financial panic and turmoil. As in the run‐up to the previous financial crisis, if banks are not compelled to explicitly and expressly disclose what measures they adopt in a bid to guarantee stakeholder liquidity, the onset of any financial shake‐up would only precipitate a meltdown. The main limitation of this study is the use of the World Wide Web as the only source of information available to bank stakeholders and/or market participants. Originality/value – The contribution of this paper to literature can be viewed from the role it plays in investigating post‐crisis measures banks have adopted in a bid to inform stakeholders on their management of liquidity risk.}, keywords = {Banks, Disclosure, Liquidity, Post‐crisis, Risk management}, pubstate = {published}, tppubtype = {article} } Purpose – The purpose of this paper is to investigate post‐crisis measures banks have adopted in a bid to manage liquidity risk. It is based on the fact that the financial liquidity market was greatly affected during the recent economic turmoil and financial meltdown. During the crisis, liquidity risk management disclosure was crucial for confidence building in market participants. Design/methodology/approach – The study investigates if Basel II pillar 3 disclosures on liquidity risk management are applied by 20 of top 33 world banks. Bank selection is based on information availability, geographic balance and comprehensiveness of the language in which information is provided. This information is searched from the World Wide Web, with a minimum of one hour allocated to “content search”, and indefinite time for “content analyses”. Such content scrutiny is guided by 16 disclosure principles classified in four main categories. Findings – Only 25 per cent of sampled banks provide publicly accessible liquidity risk management information, a clear indication that in the post‐crisis era, many top ranking banks still do not take Basel disclosure norms seriously, especially the February 2008 pre‐crisis warning by the Basel Committee on Banking Supervision. Research limitations/implications – Bank stakeholders should easily have access to information on liquidity risk management. Banks falling‐short of making such information available might not inspire confidence in market participants in events of financial panic and turmoil. As in the run‐up to the previous financial crisis, if banks are not compelled to explicitly and expressly disclose what measures they adopt in a bid to guarantee stakeholder liquidity, the onset of any financial shake‐up would only precipitate a meltdown. The main limitation of this study is the use of the World Wide Web as the only source of information available to bank stakeholders and/or market participants. Originality/value – The contribution of this paper to literature can be viewed from the role it plays in investigating post‐crisis measures banks have adopted in a bid to inform stakeholders on their management of liquidity risk. |
| 3. | Asongu, Simplice A Journal of Financial Economic Policy, 5 (1), pp. 39 - 60, 2013. Abstract | Links | BibTeX | Tags: Africa, Banks, Development, inflation, Monetary policy, panel, Prices @article{Asongu_767, author = {Simplice A Asongu}, url = {http://dx.doi.org/10.1108/17576381311317772}, doi = {10.1108/17576381311317772}, year = {2013}, date = {2013-03-13}, journal = {Journal of Financial Economic Policy}, volume = {5}, number = {1}, pages = {39 - 60}, abstract = {Purpose – The purpose of this paper is to examine the effects of policy options in financial dynamics (of money, credit, efficiency and size) on consumer prices. Soaring food prices have marked the geopolitical landscape of African countries in the past decade. Design/methodology/approach – The sample is limited to a panel of African countries for which inflation is non‐stationary. VAR models from both error correction and Granger causality perspectives are applied. Analyses of dynamic shocks and responses are also covered and six batteries of robustness checks are applied, to ensure consistency in the results. Findings – First, it is found that there are significant long‐run equilibriums between inflation and each financial dynamic. Second, when there is a disequilibrium, while only financial depth and financial size could be significantly used to exert deflationary pressures, inflation is significant in adjusting all financial dynamics. In other words, financial depth and financial size are more significant instruments in fighting inflation than financial efficiency and activity. Third, the financial intermediary dynamic of size appears to be more instrumental in exerting a deflationary tendency than financial intermediary depth. Fourth, the deflationary tendency from money supply is double that based on liquid liabilities. Practical implications – Monetary policy aimed at fighting inflation only based on bank deposits may not be very effective until other informal and semi‐formal financial sectors are taken into account. It could be inferred that, tight monetary policy targeting the ability of banks to grant credit (in relation to central bank credits) is more effective in tackling consumer price inflation than that, targeting the ability of banks to receive deposits. In the same vein, adjusting the lending rate could be more effective than adjusting the deposit rate. The insignificance of financial allocation efficiency and financial activity as policy tools in the battle against inflation could be explained by the (well documented) surplus liquidity issues experienced by the African banking sector. Social implications – This paper helps in providing monetary policy options in the fight against soaring consumer prices. By keeping inflationary pressures on food prices in check, sustained campaigns involving strikes, demonstrations, marches, rallies and political crises that seriously disrupt economic performance could be mitigated. Originality/value – To the best of the author's knowlege, there is yet no study that assesses monetary policy options that could be relevant in addressing the dramatic surge in the price of consumer commodities.}, keywords = {Africa, Banks, Development, inflation, Monetary policy, panel, Prices}, pubstate = {published}, tppubtype = {article} } Purpose – The purpose of this paper is to examine the effects of policy options in financial dynamics (of money, credit, efficiency and size) on consumer prices. Soaring food prices have marked the geopolitical landscape of African countries in the past decade. Design/methodology/approach – The sample is limited to a panel of African countries for which inflation is non‐stationary. VAR models from both error correction and Granger causality perspectives are applied. Analyses of dynamic shocks and responses are also covered and six batteries of robustness checks are applied, to ensure consistency in the results. Findings – First, it is found that there are significant long‐run equilibriums between inflation and each financial dynamic. Second, when there is a disequilibrium, while only financial depth and financial size could be significantly used to exert deflationary pressures, inflation is significant in adjusting all financial dynamics. In other words, financial depth and financial size are more significant instruments in fighting inflation than financial efficiency and activity. Third, the financial intermediary dynamic of size appears to be more instrumental in exerting a deflationary tendency than financial intermediary depth. Fourth, the deflationary tendency from money supply is double that based on liquid liabilities. Practical implications – Monetary policy aimed at fighting inflation only based on bank deposits may not be very effective until other informal and semi‐formal financial sectors are taken into account. It could be inferred that, tight monetary policy targeting the ability of banks to grant credit (in relation to central bank credits) is more effective in tackling consumer price inflation than that, targeting the ability of banks to receive deposits. In the same vein, adjusting the lending rate could be more effective than adjusting the deposit rate. The insignificance of financial allocation efficiency and financial activity as policy tools in the battle against inflation could be explained by the (well documented) surplus liquidity issues experienced by the African banking sector. Social implications – This paper helps in providing monetary policy options in the fight against soaring consumer prices. By keeping inflationary pressures on food prices in check, sustained campaigns involving strikes, demonstrations, marches, rallies and political crises that seriously disrupt economic performance could be mitigated. Originality/value – To the best of the author's knowlege, there is yet no study that assesses monetary policy options that could be relevant in addressing the dramatic surge in the price of consumer commodities. |
