Arbeitspapier
Profitability of Western European banking systems: panel evidence on structural and cyclical determinants
This paper analyses structural and cyclical determinants of banking profitability in 16 Western European countries. We find that financial structure matters, particularly through the beneficial effect of the capital market orientation in the respective national financial system. Furthermore, higher diversification regarding banks' income sources shows a positive effect. The industry concentration of national banking systems, though, does not significantly affect aggregate profitability. Business cycle effects, in particular lagged GDP growth, display a substantial procyclical impact on bank profits. These results are obtained in a single equation panel framework using the Hausman-Taylor instrument variable estimator. The data set comprises aggregate annual country data and banking group data (commercial banks, cooperative banks and savings banks) over the period 1979-2003.
- Language
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Englisch
- Bibliographic citation
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Series: Discussion Paper Series 2 ; No. 2007,17
- Classification
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Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Business Fluctuations; Cycles
Production, Pricing, and Market Structure; Size Distribution of Firms
- Subject
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bank profits
financial structure
business cycle
Bank
Rentabilität
Kapitalstruktur
Bankensystem
Finanzmarkt
Konjunktur
Westeuropa
- Event
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Geistige Schöpfung
- (who)
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Beckmann, Rainer
- Event
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Veröffentlichung
- (who)
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Deutsche Bundesbank
- (where)
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Frankfurt a. M.
- (when)
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2007
- Handle
- Last update
-
10.03.2025, 11:42 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Beckmann, Rainer
- Deutsche Bundesbank
Time of origin
- 2007
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