The impact of state and foreign ownership on banking risk: Evidence from the MENA countries

Naima Lassoued, Houda Sassi and Mouna Ben Rejeb Attia

Research in International Business and Finance, 2016, vol. 36, issue C, 167-178

Abstract: This paper investigates the impact of foreign and state ownership on banking risk. Panel data regression analysis is applied to a sample of 171 commercial banks from the MENA region during the 2006–2012 period. Two-stage least-squares analysis is conducted. Our results show that State ownership encourages banks to take more risks while foreign ownership reduces risk-taking. In addition, state-owned banks tend to increase capital adequacy ratio to hedge against high level of risk. Our finding also indicates that all categories of shareholders take a prudent attitude that influences risk reduction after the 2008 crisis.

Keywords: State ownership; Foreign ownership; MENA countries; Bank risk (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (32)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:36:y:2016:i:c:p:167-178

DOI: 10.1016/j.ribaf.2015.09.014

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