Bank Privatization in Developing and Developed Countries: Cross-Sectional Evidence on the Impact of Economic and Political Factors

48 Pages Posted: 18 Mar 2004

See all articles by Robert C. Nash

Robert C. Nash

Wake Forest University

Ekkehart Boehmer

Singapore Management University - Lee Kong Chian School of Business

Jeffry M. Netter

Department of Finance; University of Georgia Law School

Multiple version iconThere are 2 versions of this paper

Date Written: September 28, 2004

Abstract

We examine how political, institutional, and economic factors are related to a country's decision to privatize state-owned banks. Using a comprehensive panel of 101 countries from 1982 to 2000, we find that the determinants of this decision differ markedly between OECD and non-OECD nations. Political factors significantly affect the likelihood of bank privatization only in developing countries. Specifically, in non-OECD countries, a bank privatization is more likely the more accountable the government is to its people. In contrast, none of our political variables affects the bank privatization decision in developed countries. Economic factors (such as the quality of the nation's banking sector) are significant determinants of bank privatization in both OECD and non-OECD nations.

Keywords: Privatization, bank, developing countries

JEL Classification: G15, G21, G38

Suggested Citation

Nash, Robert C. and Boehmer, Ekkehart and Netter, Jeffry M., Bank Privatization in Developing and Developed Countries: Cross-Sectional Evidence on the Impact of Economic and Political Factors (September 28, 2004). Available at SSRN: https://ssrn.com/abstract=517843 or http://dx.doi.org/10.2139/ssrn.517843

Robert C. Nash (Contact Author)

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

Ekkehart Boehmer

Singapore Management University - Lee Kong Chian School of Business ( email )

Singapore

Jeffry M. Netter

Department of Finance ( email )

Terry College of Business
Athens, GA 30602-6253
United States
706-542-4450 (Phone)

HOME PAGE: http://www.terry.uga.edu/directory/profile/jnetter/

University of Georgia Law School

225 Herty Drive
Athens, GA 30602
United States

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