Bank Ownership and Performance Does Politics Matter?

Alejandro Micco (), Ugo Panizza and Yañez, Monica

POLIS Working Papers from Institute of Public Policy and Public Choice - POLIS

Abstract: This paper uses a new dataset to reassess the relationship between bank ownership and bank performance, providing separate estimations for developing and industrial countries. It finds that state-owned banks located in developing countries tend to have lower profitability and higher costs than their private counterparts, and that the opposite is true for foreign-owned banks. The paper finds no strong correlation between ownership and performance for banks located in industrial countries. Next, in order to test whether the differential in performance between public and private banks is driven by political considerations, the paper checks whether this differential widens during election years; it finds strong support for this hypothesis.

Keywords: Banking; Privatization; Ownership; Performance (search for similar items in EconPapers)
JEL-codes: D21 G21 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2006-02
New Economics Papers: this item is included in nep-eff, nep-fin, nep-fmk and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Bank ownership and performance. Does politics matter? (2007)
Working Paper: Bank Ownership and Performance Does Politics Matter? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:uca:ucapdv:62

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