Examining the relationship between bank profitability and economic growth: insights from Central and Eastern Europe

Jordan Kjosevski ()
Additional contact information
Jordan Kjosevski: University St. Kliment Ohridski – Bitola, Republic of Macedonia

Bank i Kredyt, 2024, vol. 55, issue 2, 181-200

Abstract: In this research article, we delve into the influence of bank profitability on the economic growth of 16 countries in Central and Eastern Europe over the period spanning from 1999 to 2022. While low levels of bank profitability are often seen as a potential threat to economic growth, the question of whether higher profitability contributes positively to growth remains unanswered. Our extensive empirical analysis, utilizing various econometric methods, consistently reveals a statistically and economically significant positive relationship. Specifically, a one percent increase in the return on assets of banks is associated with a notable increase in economic growth, falling within the range of 0.575 to 0.603 percentage points. In addition to these significant findings, future research could delve deeper into the nuanced relationships between different dimensions of bank profitability and economic performance, including the effects of varying ownership structures and competition dynamics.

Keywords: bank profitability; economic growth; Central and Eastern Europe; panel analysis (search for similar items in EconPapers)
JEL-codes: G21 O16 O40 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bankikredyt.nbp.pl/content/2024/02/bik_02_2024_03.pdf (application/pdf)

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:nbp:nbpbik:v:55:y:2024:i:2:p:181-200

Access Statistics for this article

More articles in Bank i Kredyt from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Wojciech Burjanek ().