The Uniform Relationship Between Managerial Ability And Bank Loan Quality: Does It Hold? Evidence From Quantile Regressions

Sedki Zaiane () and Maria Semenova ()
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Sedki Zaiane: National Research University Higher School of Economics
Maria Semenova: National Research University Higher School of Economics

HSE Working papers from National Research University Higher School of Economics

Abstract: This study examines the relationship between managerial ability (MA) and bank loan quality, employing a quantile regression model. It analyzes whether the impact of MA on loan quality changes across various quantiles of risk. Using a sample of 126 MENA banks (2006–2020), the results reveal that the impact of MA on bank loan quality varies across loan quality quantiles. Using non-performing loans (NPLs) as a loan quality measure, we find that MA reduces NPLs at moderate quantile levels. This relation becomes inverse at higher level of NPLs. Our findings are strengthened by a quantile-on-quantile regression. These results add to the literature by providing insight between MA and bank loan quality using a non-monotonic methodology.

Keywords: No (search for similar items in EconPapers)
JEL-codes: C21 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2025
New Economics Papers: this item is included in nep-cfn
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Published in WP BRP Series: Financial Economics / FE, February 2025, pages - 26

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