Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210484
Authors: 
Mutarindwa, Samuel
Schäfer, Dorothea
Stephan, Andreas
Year of Publication: 
2020
Series/Report no.: 
GLO Discussion Paper No. 444
Abstract: 
This paper links banking systems development to the colonial and legal history of African countries. Specifically, we investigate the impact of differing legal traditions on the development of existing investor and creditor protection, and on African banking systems. Based on a sample of 40 African countries from 2000 to 2016, our empirical findings show a significant dependence of current financial institutions on the legal origin and the colonization type. Findings also reveal that current legal financial institutions are not the major determinants of banking system development, whereas institutional and regulatory quality significantly matter for banking system development in both common and civil law countries. Strong creditor rights reduce the cost of banking in African countries.
Subjects: 
Legal origins
colonial history
financial institutions
banking systems
Hausman-Taylor estimation
JEL: 
G21
G38
G39
K15
K40
Document Type: 
Working Paper

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