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What drives bank performance in transitions economies? The impact of reforms and regulations

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journal contribution
posted on 2023-06-09, 03:32 authored by Emmanuel Mamatzakis, Maria Psillaki
This paper investigates the effects of financial regulations and structural reforms on the cost efficiency of the banking industries of 10 Central and Eastern European (CEE) countries for the period 2004 to 2009. Cost efficiency scores are estimated using stochastic frontier analysis, whilst panel regressions examine the impact of regulation and liberalisation on bank performance using the EBRD transitional reform indicator and the Fraser economic freedom index. By considering both indexes we are able to account for the effects of progress towards more sound banking practices as well as the impact of the credit market, labor market and business sector regulatory regimes on bank efficiency. Our empirical analysis shows that structural reforms on labor and business markets exert a positive impact on bank performance. In line with the public interest view, we find the effect of credit regulation banking on cost efficiency is positive. We also find that better capitalized banks are more cost efficient.

History

Publication status

  • Published

File Version

  • Accepted version

Journal

Research in International Business and Finance

ISSN

0275-5319

Publisher

Elsevier

Volume

39a

Page range

578-594

Department affiliated with

  • Business and Management Publications

Full text available

  • Yes

Peer reviewed?

  • Yes

Legacy Posted Date

2016-10-17

First Open Access (FOA) Date

2018-03-30

First Compliant Deposit (FCD) Date

2016-10-17

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