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Determinants of winning and losing persistence in the Polish banking sector

Krzysztof Jackowicz ()
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Krzysztof Jackowicz: Finance Department, Kozminski University (Akademia Leona Koźmińskiego w Warszawie)

Bank i Kredyt, 2009, vol. 40, issue 3, 5-23

Abstract: The article explores the reasons for winning and losing persistence in the Polish banking sector in the 1994–2005 period. It empirically verifies four hypotheses. They associate the performance persistence with market power, informational opacity, ownership structure, as well as with different operational and risk profiles of banks. Estimation of probit models led to the conclusion that in Poland market power related to the developed distribution channels and informational opacity make winning persistence more likely while preventing losing persistence from occurring. Furthermore, foreign-controlled banks have more chances to succeed repeatedly and avert subsequent failures. The picture of performance persistence in the Polish banking sector is biased by banks’ earnings management, especially by the avoidance of reporting small losses.

Keywords: performance persistence; banking system; emerging markets (search for similar items in EconPapers)
JEL-codes: G21 G14 (search for similar items in EconPapers)
Date: 2009
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Handle: RePEc:nbp:nbpbik:v:40:y:2009:i:3:p:5-23