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    What drives bank performance in transitions economies? The impact of reforms and regulations

    Psillaki, M. and Mamatzakis, Emmanuel (2017) What drives bank performance in transitions economies? The impact of reforms and regulations. Research in International Business and Finance 39 , pp. 578-594. ISSN 0275-5319.

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    This paper investigates the effects of financial regulations and structural reforms on the cost efficiency of the banking industries of 10 Central and Eastern European (CEE) countries for the period 2004–2009. Cost efficiency scores are estimated using stochastic frontier analysis, whilst panel regressions examine the impact of regulation and liberalisation on bank performance using the EBRD transitional reform indicator and the Fraser economic freedom index. By considering both indexes we are able to account for the effects of progress towards more sound banking practices as well as the impact of the credit market, labor market and business sector regulatory regimes on bank efficiency. Our empirical analysis shows that structural reforms on labor and business markets exert a positive impact on bank performance. In line with the public interest view, we find the effect of credit regulation banking on cost efficiency is positive. We also find that better capitalized banks are more cost efficient.


    Item Type: Article
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Research Centres and Institutes: Accounting and Finance Research Centre
    Depositing User: Emmanuel Mamatzakis
    Date Deposited: 06 Mar 2020 14:34
    Last Modified: 02 Aug 2023 17:57


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