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

Posted: 30 Mar 2006

See all articles by Ekkehart Boehmer

Ekkehart Boehmer

Singapore Management University - Lee Kong Chian School of Business

Robert C. Nash

Wake Forest University

Jeffry M. Netter

Department of Finance; University of Georgia Law School

Multiple version iconThere are 2 versions of this paper

Abstract

We examine how political, institutional, and economic factors are related to a country's decision to privatize state-owned banks. Using a panel of 101 countries from 1982 to 2000, we find that political factors significantly affect the likelihood of bank privatization only in developing countries. Specifically, in non-OECD countries, 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

Boehmer, Ekkehart and Nash, Robert C. and Netter, Jeffry M., Bank Privatization in Developing and Developed Countries: Cross-Sectional Evidence on the Impact of Economic and Political Factors. Journal of Banking and Finance, Vol. 29, pp. 1981-2013, 2005, (Special issue on Bank Privatization in Low and Middle Income Countries) , Available at SSRN: https://ssrn.com/abstract=892704

Ekkehart Boehmer (Contact Author)

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

Singapore

Robert C. Nash

Wake Forest University ( email )

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

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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