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Board of Governors of the Federal Reserve System Wharton Financial Institutions Center
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@MISC{Berger_boardof,
author = {Allen N. Berger and George R. G. Clarke and World Bank Decrg and Robert Cull and World Bank Decrg and Gregory F. Udell},
title = {Board of Governors of the Federal Reserve System Wharton Financial Institutions Center},
year = {}
}
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Abstract
We jointly analyze the static, selection, and dynamic effects of domestic, foreign, and state ownership on bank performance. We argue that it is important to include indicators of all the relevant governance effects in the same model. “Nonrobustness ” checks (which purposely exclude some indicators) support this argument. Using data from Argentina in the 1990s, our strongest and most robust results concern state ownership. State-owned banks have poor long-term performance (static effect), those undergoing privatization had particularly poor performance beforehand (selection effect), and these banks dramatically improved following privatization (dynamic effect). However, much of the measured improvement is likely due to placing nonperforming loans into residual entities, leaving “good ” privatized banks.
Keyphrases
dynamic effect bank performance poor long-term performance nonperforming loan residual entity state-owned bank measured improvement selection effect following privatization state ownership undergoing privatization relevant governance effect robust result concern state ownership static effect good privatized bank nonrobustness check poor performance beforehand
