Do Institutional and Political Factors Matt er for the Efficiency of Banking Sectors?
Journal Title: Journal of Banking and Financial Economics - Year 2014, Vol 1, Issue 1
Abstract
This paper investigates the relevance of banking-sector-specifi c and macroeconomic determinants of profi tability of 21 banking sectors over the years 1995–2009. In the analysis we apply the Arellano and Bond GMM-estimator to aggregated data collected in a harmonized way by the OECD, to fi nd out whether banking-sector-specifi c and macroeconomic determinants which signifi cantly affect the effi ciency of individual banks, are also of great importance to the profi tability (proxied by ROA and ROE ratios) of banking sectors. Our results suggest that banking-sector-specifi c determinants affect the effi ciency of banks in the anticipated way. Macroeconomic variables have a statistically-signifi cant impact on both ROA and ROE. The sensitivity of effi ciency to both groups of determinants depends on institutional and political criteria.
Authors and Affiliations
Małgorzata Olszak, Patrycja Chodnicka
Keywords
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- EP ID EP342417
- DOI 10.7172/2353-6845.jbfe.2014.1.3
- Views 109
- Downloads 0
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