Abstract
This paper investigates the relevance of banking- sector- specific and macroeconomic determinants of profitability 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 find out whether banking-sector-specific and macroeconomic determinants which significantly affect the efficiency of individual banks, are also of great importance to the profitability (proxied by ROA and ROE ratios) of banking sectors. Our results suggest that banking-sector-specific determinants affect the efficiency of banks in the anticipated way. Macroeconomic variables have a statistically-significant impact on both ROA and ROE. The sensitivity of efficiency to both groups of determinants depends on institutional and political criteria.
Recommended Citation
Olszak, Małgorzata Anna and Chodnicka, Patrycja
(2024)
"Do institutional and political factors matter for the efficiency of banking sectors?,"
Journal of Banking and Financial Economics: Vol. 2014:
No.
1, Article 3.
DOI: 10.7172/2353-6845.jbfe.2014.1.3
Available at:
https://press.wz.uw.edu.pl/jbfe/vol2014/iss1/3
First Page
40
Last Page
58
Page Count
19
Received Date
4 November 2013
Revised Date
23 November 2013
Accept Date
15 January 2014
Online Available Date
19 May 2014
DOI
10.7172/2353-6845.jbfe.2014.1.3
JEL Code
C23; G21; G34
Publisher
University of Warsaw