Table 2 Constraining with Bank Size (overlapping Bank size thresholds)
From: Size, efficiency, market power, and economies of scale in the African banking sector
| Â | Dependent Variable: Interest Rate Margin | |||||||
|---|---|---|---|---|---|---|---|---|
Baseline | Size ≤ 0.25 | Size ≤ 0.50 | Size ≤ 0.75 | |||||
Panel A: Controlling for the Unobserved Heterogeneity (FE regressions) | ||||||||
 Constant | 205.897 (0.102) | 205.07 (0.105) | 184.386 (0.359) | 199.596 (0.227) | 176.131 (0.289) | 158.287 (0.310) | 197.983 (0.167) | 176.516 (0.206) |
 Lerner | 1.302 (0.454) | 1.494 (0.444) | 0.761 (0.719) | 1.184 (0.612) | 0.894 (0.651) | 1.017 (0.638) | 0.845 (0.655) | 0.959 (0.638) |
 ES | − 225.92 (0.115) | −222.89 (0.119) | −200.25 (0.389) | − 213.458 (0.263) | −188.169 (0.323) | − 165.13 (0.355) | −213.85 (0.191) | − 187.545 (0.238) |
 GDPpcg | 0.032 (0.380) | −0.031 (0.428) | −0.011 (0.869) | 0.028 (0.689) | − 0.028 (0.611) | − 0.041 (0.477) | − 0.032 (0.551) | −0.0474 (0.412) |
 Inflation | 0.001 (0.829) | −0.0003 (0.967) | 0.011 b (0.034) | 0.007 (0.311) | −.00003 (0.997) | −0.001 (0.904) | 0.0002 (0.980) | −0.0009 (0.910) |
 Pop. density | 0.100 (0.190) | 0.099 (0.201) | 0.068 (0.622) | 0.020 (0.888) | 0.056 (0.615) | 0.044 (0.707) | 0.0808 (0.385) | 0.070 (0.486) |
 Loan/Assets | – | −2.338 (0.289) | – | −2.600 (0.484) | – | −3.060 (0.219) | – | −3.063 (0.209) |
 Deposit/Assets | – | −3.666 (0.373) | – | −3.446 (0.547) | – | −4.159 (0.357) | – | −3.798 (0.378) |
 Bank Branches | – | 0.254 (0.200) | – | 0.671 (0.177) | – | 0.231 (0.341) | – | 0.227 (0.338) |
 Adjusted R2(within) | 0.026 | 0.043 | 0.018 | 0.043 | 0.016 | 0.033 | 0.022 | 0.036 |
 Fisher | 0.64 | 1.48 | 9.30 c | 7.74 c | 0.54 | 1.00 | 0.75 | 1.17 |
 sigma_u | 14.187 | 15.326 | 10.328 | 9.753 | 9.904 | 9.505 | 12.038 | 11.605 |
 sigma_e | 2.987 | 3.236 | 3.575 | 3.674 | 3.264 | (3.434) | 3.188 | 3.399 |
 rho | 0.957 | 0.957 | 0.892 | 0.875 | 0.902 | 0.884 | 0.9344 | 0.920 |
 Banks | 132 | 118 | 95 | 89 | 111 | 103 | 115 | 106 |
 Observations | 540 | 447 | 338 | 316 | 426 | 384 | 454 | 400 |
Panel B: Controlling for endogeneity (FE Effects with IV regressions) | ||||||||
 Constant | 79.954 (0.135) | 62.016 (0.142) | 39.372 (0.751) | 12.227 (0.885) | 52.258 (0.632) | 7.352 (0.927) | 75.642 (0.178) | 51.023 (0.241) |
 Lerner | 0.985 (0.627) | 1.393 (0.537) | −0.052 (0.980) | 0.347 (0.884) | 0.170 (0.934) | 0.337 (0.878) | 0.452 (0.833) | 0.764 (0.739) |
 IVES | −84.649 (0.165) | −60.273 (0.212) | −33.208 (0.817) | 4.109 (0.966) | −46.979 (0.708) | 9.185 (0.920) | −75.702 (0.237) | −43.902 (0.373) |
 GDPpcg | 0.0239 (0.484) | −0.0362 (0.496) | −0.019 (0.739) | 0.030 (0.680) | −0.038 (0.433) | −0.039 (0.507) | − 0.044 (0.347) | −0.047 (0.420) |
 Inflation | 0.0003 (0.966) | −0.0006 (0.941) | 0.008 (0.052) | 0.007 (0.377) | −0.001 (0.823) | −0.001 (0.857) | − 0.001 (0.867) | −0.001 (0.882) |
 Pop. density | 0.061 (0.262) | 0.061 (0.329) | −0.007 (0.943) | −0.056 (0.640) | −0.002 (0.981) | − 0.019 (0.838) | 0.0332 (0.585) | 0.028 (0.707) |
 Loan/Assets | – | −5.253 a (0.083) | – | −5.761 (0.187) | – | −5.574 a (0.066) | – | −5.668 a (0.083) |
 Deposit/Assets | – | −4.487 (0.371) | – | −4.890 (0.468) | – | −5.269 (0.318) | – | −4.548 (0.375) |
 Bank Branches | – | 0.178 (0.364) | – | 0.514 (0.315) | – | 0.139 (0.557) | – | 0.1574 (0.514) |
 Adjusted R2(within) | 0.010 | 0.034 | 0.005 | 0.034 | 0.003 | 0.028 | 0.007 | 0.030 |
 Fisher | 0.51 | 1.31 | 11.12 c | 7.31 c | 0.24 | 0.98 | 0.69 | 1.12 |
 sigma_u | 9.254 | 10.026 | 5.428 | 8.751 | 6.268 | 6.379 | 7.691 | 6.983 |
 sigma_e | 3.060 | 3.292 | 3.680 | 3.757 | 3.354 | 3.491 | 3.277 | 3.455 |
 rho | 0.901 | 0.902 | 0.685 | 0.844 | 0.777 | 0.769 | 0.846 | 0.803 |
 Banks | 132 | 118 | 95 | 89 | 111 | 103 | 115 | 106 |
 Observations | 515 | 436 | 325 | 306 | 410 | 374 | 437 | 390 |