Firm credit and financial development: Evidence from the management practices across the universe of Ethiopian bank branches
Management practices and banking: The case of Ethiopia
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- This study investigates whether management practices allow Ethiopian bank branches to improve their credit provision.
- Researchers surveyed over 1,900 branches affiliated with 16 Ethiopian banks to score management practices across various dimensions and collect information on day-to-day operations.
- Ethiopian bank branches that adopt stronger management practices issue loans with larger amounts, longer maturities, smaller collateral, and lower default rates.
- There exists a positive relationship between management practices and the ability to serve more extensive geographic areas.
- Private ownership and branch competition are associated with the adoption of better management practices.