 Political environment and bank performance: Does bank size matter?Marc Kouzez Economic Systems, 2023, vol. 47, issue 1 Abstract: In this study, we investigate the relationship between the political environment and bank performance and whether this relationship is contingent on bank size. We use a sample comprising more than 1600 banks in 58 countries and a set of multidimensional measures collected by the Economist Intelligence Unit to proxy for the political environment. Overall, our findings indicate that political uncertainty is associated with a significant decrease in bank performance. A deeper analysis shows that bank size matters when analyzing the relationship between political risk and bank performance. Precisely, large banks are less vulnerable and more resilient under political distress than other banks. Our findings shed light on the importance of bank size as a determinant of bank performance in countries with high political risk, particularly for investment decision makers. The results are robust to a variety of alternative measurements, and different estimation techniques to deal with endogeneity. Keywords: Bank performance; Bank size; Political environment (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:47:y:2023:i:1:s0939362522001182 DOI: 10.1016/j.ecosys.2022.101056 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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