Determinants of Bank Profitability in the South Eastern European Region

Journal of Financial Decision Making, Vol. 2, pp. 1-17

Posted: 16 Jun 2008 Last revised: 20 Jun 2017

See all articles by Panayiotis P. Athanasoglou

Panayiotis P. Athanasoglou

Manthos D. Delis

Montpellier Business School

Christos Staikouras

Athens University of Economics and Business - Department of Accounting and Finance

Abstract

The aim of this study is to examine the profitability behaviour of bank-specific, industry-related and macroeconomic determinants, using an unbalanced panel dataset of South Eastern European (SEE) credit institutions over the period 1998-2002. The estimation results indicate that, with the exception of liquidity, all bank-specific determinants significantly affect bank profitability in the anticipated way. A key result is that the effect of concentration is positive, which provides evidence in support of the structure-conduct-performance hypothesis, even though some ambiguity arises given its interrelationship with the efficient-structure hypothesis. In contrast, a positive relationship between banking reform and profitability was not identified, whilst the picture regarding the macroeconomic determinants is mixed. The paper concludes with some remarks on the practicality and implementability of the findings.

Keywords: Bank profitability, South Eastern European banking sector, Random effects

JEL Classification: G21, C23, L2

Suggested Citation

Athanasoglou, Panayiotis P. and Delis, Manthos D. and Staikouras, Christos, Determinants of Bank Profitability in the South Eastern European Region. Journal of Financial Decision Making, Vol. 2, pp. 1-17. Available at SSRN: https://ssrn.com/abstract=1146385

Manthos D. Delis

Montpellier Business School ( email )

2300 Avenue des Moulins
Montpellier, 34080
France

Christos Staikouras

Athens University of Economics and Business - Department of Accounting and Finance ( email )

76 Patission Street
Athens, 104 34
Greece
+30 210 8203 459 (Phone)

No contact information is available for Panayiotis P. Athanasoglou

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
2,684
PlumX Metrics