Determinants of financial performance of banks in Central and Eastern Europe
Year: 2018
Type: article
Abstract: The aim of this study is to investigate the bank-specific, industry-specific, and macroeconomic determinants of the financial performance of banks in Central and Eastern European Countries. For this purpose, first we determined the factors affecting performance, based on findings in the literature. We constructed a financial performance index (FPI) based on CAMEL ratios and then ran the computed index on the aforementioned determinants. In the analysis, we used unbalanced panel data covering the period 2009-2014, which were collected from the BankScope database, World Development Indicators, and the Financial Structure and Development Dataset. We conducted an empirical analysis using fixed-effect panel regression. Our results suggest that the asset quality and earnings of banks are negatively affected by size, and positively affected by business mix and inflation. Capital adequacy and liquidity were found to be negatively affected by size and positively affected by bank concentration and economic growth.
Source: Business and Economic Horizons
DOI: 10.15208/beh.2018.37
Authors: Roger Antoun, Ali Coskun, Bojan Georgievski
Institution: American University of the Middle East
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2804223096