Determinants of Bank Profitability in the South Eastern European Region

Panayiotis Athanasoglou (ppathanasoglou@gmail.com), Manthos Delis (elmanthos@hotmail.com) and Christos K. Staikouras
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Christos K. Staikouras: Athens University of Economics and Business

No 47, Working Papers from Bank of Greece

Abstract: The aim of this study is to examine the profitability behaviour of bank-specific, industryrelated and macroeconomic determinants, using an unbalanced panel dataset of South Eastern European (SEE) credit institutions over the period 1998-2002. The estimation results indicate that, with the exception of liquidity, all bank-specific determinants significantly affect bank profitability in the anticipated way. A key result is that the effect of concentration is positive, which provides evidence in support of the structure-conduct-performance hypothesis, while at the same time some relevance of the efficient-structure hypothesis cannot be rejected. In contrast, a positive relationship between banking reform and profitability was not identified, whilst the picture regarding the macroeconomic determinants is mixed. The paper concludes with some remarks on the practicality and implementability of the findings.

Keywords: Bank profitability; South Eastern European banking sector; Random effects (search for similar items in EconPapers)
JEL-codes: C23 G21 L2 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2006-09
New Economics Papers: this item is included in nep-ban and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (128)

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Related works:
Working Paper: DETERMINANTS OF BANK PROFITABILITY IN THE SOUTH EASTERN EUROPEAN REGION (2006)
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