The government's role in government-owned banks

Chung-Hua Shen, Iftekhar Hasan and Chih-Yung Lin

No 15/2013, Bank of Finland Research Discussion Papers from Bank of Finland

Abstract: Abstract In this study, we reinvestigate the question of whether government banks are inferior to private banks. We use cross country data from 1993 to 2007 to trace the different types of government banks. These types comprise banks that acquire distressed banks, normal banks, or no banks at all. Contrary to common belief, the evidence shows that unless government banks are required to purchase a distressed bank because of political factors (the government's role), their performances are at par with that of private banks. This fact particularly holds true in countries with poor records on political rights and governance.

Keywords: Government banks; Political factor; Government role; Merger; Distressed bank; Institutional factor (search for similar items in EconPapers)
JEL-codes: C23 G21 G28 G34 (search for similar items in EconPapers)
Date: 2013
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Related works:
Journal Article: The Government’s Role in Government-owned Banks (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bofrdp:rdp2013_015

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