Ethnicity, Banking and Local Economic Development: Evidence from Ethiopia

Ethnicity, Banking and Local Economic Development: Evidence from Ethiopia

Author: 
Regasa, Dereje
Publisher: 
Oxford University Press
Date published: 
2022
Record type: 
Responsibility: 
Fielding, David, jt. author
Roberts, Helen, jt. author
Journal Title: 
Journal of African Economies
Source: 
Journal of African Economies, Vol. 31, No. 5, August 2022 pp. 409-440
ISSN: 
0963 8024|1464 3723
Abstract: 

A unique dataset is used to uncover one mechanism generating regional and ethnic inequality in Ethiopia. Individual banks' location decisions depend on the degree of similarity between the ethnic composition of each locality and the ethnic composition of the bank's board of directors. Using ethnic similarity as an instrument for bank location and climate as an instrument for economic development, we model both local banking provision and local economic development. Our model predicts that if the ethnic composition of all boards reflected the national population, then banks would have an incentive to operate in a wider range of locations.

Language: 
Country focus: 

CITATION: Regasa, Dereje. Ethnicity, Banking and Local Economic Development: Evidence from Ethiopia . : Oxford University Press , 2022. Journal of African Economies, Vol. 31, No. 5, August 2022 pp. 409-440 - Available at: http://library.au.int/ethnicity-banking-and-local-economic-development-evidence-ethiopia