Legal governance and banking efficiency

Shuwen Wang and Han Luo

Finance Research Letters, 2025, vol. 79, issue C

Abstract: This study using panel data from 15 middle- and high-income countries between 2000 and 2022. Employing a fixed effects panel model, the analysis also investigates the moderating effect of income inequality on these relationships. The results indicate that the legal environment, corruption control, and regulatory quality all positively contribute to banking efficiency. Moderation analysis reveals that income inequality does not influence the positive effect of the legal environment but strengthens the positive effects of corruption control and regulatory quality. The study suggests that policymakers should prioritize strengthening legal infrastructure and improving regulatory standards to support banking system efficiency.

Keywords: Banking efficiency; Legal governance; Financial development index; Legal environment; Corruption control; Regulatory quality (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325005021

DOI: 10.1016/j.frl.2025.107239

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