EconPapers    
Economics at your fingertips  
 

The determinants of net interest margin during transition

Maria-Eleni Agoraki and Georgios Kouretas ()

Review of Quantitative Finance and Accounting, 2019, vol. 53, issue 4, No 3, 1005-1029

Abstract: Abstract In this paper we examine the banking sector of the Central and Eastern European (CEE) countries during the transition period 1998–2016 in a number of critical dimensions. We place particular importance on the effect that the regulatory framework along with a group of bank-specific, industry-specific and macroeconomic factors have on the net interest margin (NIM) in the banking sectors of the Central and Eastern European countries over the period 1998–2016. In addition to the standard determinants employed in the literature, the present study provides a unique natural experiment to examine the effect of the extensive banking sector reform that took place during the examined period in the CEE countries. We employ both static and dynamic frameworks as well as advanced market structure measures and we argue that net interest margin is determined by bank-specific characteristics such as equity capital, risk and operational inefficiency. Furthermore, it is shown that the regulatory framework as well as the presence of foreign-owned institutions in the CEE countries play an important role in determining NIM. However, as financial systems develop and the reform process ends, both the current and future rates of economic growth are likely to have an enhanced impact on bank margins.

Keywords: Net interest margin; Central Eastern European banking; Banking sector reform (search for similar items in EconPapers)
JEL-codes: G21 G32 G38 P34 P52 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11156-018-0773-y Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:rqfnac:v:53:y:2019:i:4:d:10.1007_s11156-018-0773-y

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/11156/PS2

DOI: 10.1007/s11156-018-0773-y

Access Statistics for this article

Review of Quantitative Finance and Accounting is currently edited by Cheng-Few Lee

More articles in Review of Quantitative Finance and Accounting from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2022-09-27
Handle: RePEc:kap:rqfnac:v:53:y:2019:i:4:d:10.1007_s11156-018-0773-y