TY  - JOUR
AB  - Purpose This paper examines the effect of both de jure and de facto measures of financial integration on bank profitability in five regional economic communities of Africa.Design/methodology/approach Using panel data from 405 banks operating in 47 African countries across five regional economic communities over 2007–2014, the study constructs a composite measure of bank profitability. The study then employs the dynamic two-step system GMM estimation technique to test the effect of both de jure and de facto measures of financial integration on bank profitability in Africa and across five sub-regional markets.Findings Overall, the results support a positive relationship between financial integration and overall bank profitability in Africa, except for the Arab Maghreb Union and Southern Africa Development Community.Practical implications The findings of this study suggest that increased financial integration in Africa directly improves bank’s overall profitability and the variations among the sub-regional markets inform tailored policy initiatives.Originality/value To the best of the authors' knowledge, this is the first study on Africa to employ a composite measure of bank profitability to assess its determinants. It is also the first to include both de facto and de jure financial integration measures in a single study. This is also the first largest comparative study on bank profitability in Africa.
VL  - 16
IS  - 3
SN  - 1746-8809
DO  - 10.1108/IJOEM-08-2018-0435
UR  - https://doi.org/10.1108/IJOEM-08-2018-0435
AU  - Banyen Kannyiri
AU  - Biekpe Nicholas
PY  - 2020
Y1  - 2020/01/01
TI  - Financial integration and bank profitability in five regional economic communities in Africa
T2  - International Journal of Emerging Markets
PB  - Emerald Publishing Limited
SP  - 468
EP  - 491
Y2  - 2024/04/19
ER  -