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Data were collected for 18 countries: Botswana, Ethiopia, Gambia, Ghana, Kenya, Lesotho, Malawi, Mauritius, Mozambique (Portuguese speaking), Namibia, Nigeria, Rwanda (English and French speaking), Sierra Leone, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe. Liberia is excluded because it is in a post-conflict situation and data are limited. In Eritrea English is the language of higher education, though not an official language, but little useful data are available. South Africa is a larger and more developed economy than the others, and in Seychelles, as in Rwanda, some French is spoken. Adding these countries to the sample did not qualitatively change the results.
In some cases assumptions needed to be made when share information was missing. If no information was available the bank was assumed to be a private domestic bank, unless the name strongly suggested otherwise. In some cases stockholders that appear to be private or domestic are in turn owned by public or foreign entities. When this could be determined adjustments were made to the shares. If a bank was majority public owned it was given a 100 percent public share.
Because of serial correlation, all regressions include an AR(1) term. Higher order AR terms do not appear to be relevant since the addition of a single AR(1) term brought Durbin-Watson statistics close to 2, higher order AR(1) terms were not significant, and there was no obvious rationale for expecting higher order serial correlation.
Note that a second AR term was added because it is significant and the DW statistic is close to 1 without it. It does not change the significance of the interest rate spread variable.