Domestic-Political Risk, Global Economic Policy Uncertainty, and Banks’ Profitability: Evidence from Ukrainian Banks

Seyed Alireza Athari (2020) Domestic political risk, global economic policy uncertainty, and banks’ profitability: evidence from Ukrainian banks, Post-Communist Economies, DOI: 10.1080/14631377.2020.1745563

31 Pages Posted: 23 Jun 2020

See all articles by Seyed Alireza Athari

Seyed Alireza Athari

Eastern Mediterranean University - Department of Banking and Finance; Girne American University

Date Written: May 28, 2020

Abstract

This study specifically examines the effects of domestic-political risk and global economic policy uncertainty factors on the profitability of Ukrainian banks during the 2005-2015 period. The empirical results underscore that the domestic-political stability and global economic policy uncertainty have significant positive and negative effect on Ukrainian banks' profitability, respectively. Results suggest that a rise of Ukrainian banks’ profitability depends significantly on decreasing domestic-political and global risk levels. Likewise, the results of traditional determinants indicate that the profitability of Ukrainian banks is shaped by the bank and industry-specific determinants. The results are robust and consistent when alternative model specifications are conducted. The findings of this study have important policy implications for policymakers, banks' managers, and analysts.

Keywords: Political risk; global economic policy uncertainty; Ukrainian banks; Profitability

JEL Classification: C23; G18; G21

Suggested Citation

Athari, Seyed Alireza, Domestic-Political Risk, Global Economic Policy Uncertainty, and Banks’ Profitability: Evidence from Ukrainian Banks (May 28, 2020). Seyed Alireza Athari (2020) Domestic political risk, global economic policy uncertainty, and banks’ profitability: evidence from Ukrainian banks, Post-Communist Economies, DOI: 10.1080/14631377.2020.1745563, Available at SSRN: https://ssrn.com/abstract=3612878

Seyed Alireza Athari (Contact Author)

Eastern Mediterranean University - Department of Banking and Finance ( email )

Fmagusta North Cyprus, via Mersin-10
Turkey

Girne American University ( email )

Faculty of Architecture
Girne American University(GAU)
Girne(Kyrenia), 99428

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