Bank risk-taking and competition in developing banking markets: Does efficiency level matter? Evidence from Africa

Luc Matabaro Borauzima, Aline Muller

Résultats de recherche: Contribution à un journalArticleRevue par des pairs


We contribute to the existing literature on the nonlinear nexus between competition and risk-taking by exploring how differences in efficiency levels affect the risk-taking of banks when competition increases. Based on a sample of 430 African banks, this paper reveals that, banks with high and low efficiency tend to take more risk than those with average efficiency level. This study further suggests that bank specific characteristics and macroeconomic dynamics, play an important role in the competition-risk-taking nexus within African banking industry. Besides, while the penetration of African Cross-border banks does not stimulate risk-taking in the hosts domestic markets, an improvement of banking regulation (Basel 2.5, 3 and further) is mandatory to mitigate their possible adverse effects on the competition-financial stability nexus.

langue originaleAnglais
Numéro d'article100963
journalEmerging Markets Review
Date de mise en ligne précoce13 sept. 2022
Les DOIs
étatE-pub ahead of print - 13 sept. 2022

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