Shuleski, Borche

2017-07-19T00:00:30Z

https://repository.ihu.edu.gr//xmlui/handle/11544/15909

Banking sector

Panel data

Operational efficiency

masterThesis

This dissertation was written as part of the Executive Master of Business Administration programme at the International Hellenic University. The purpose of this study is to theoretically conceptualize and empirically validate some of the pertinent drivers of banks' profitability in the context of the FYROM's developing economy.

Banks and banking

free

School of Economics, Business Administration and Legal Studies, Executive MBA

This dissertation was written as part of the Executive Master of Business Administration programme at the International Hellenic University. The purpose of this study is to theoretically conceptualize and empirically validate some of the pertinent drivers of banks' profitability in the context of the FYROM’s developing economy. Econometric analysis on panel data using random effect model was employed and the proposed research model was evaluated based on commonly reported statistical measures. Using balanced panel of 13 banks for the period from 2007 until 2015, it was found that main drivers of banks profitability are GDP growth, market concentration, ownership, credit risk, operating expenses and operational efficiency, while inflation, market share, bank size and liquidity risk do not influence the banks’ profitability. Banks operating in developing economy context need to focus on credit risk, operational expenses and operational efficiency as drivers that can be controlled in order to improve the financial performance and carefully monitor other drivers that significantly affect the profitability. To date, prior studies have mainly focused on analysing banks taking into consideration the banks ownership (domestic or foreign-owned banks). This study offers evidence-based insights on the relationships between each of the analysed variables and profitability, amended with dummy variable depending not on whether the banks are domestic or foreign-owned but whether they are owned and controlled by a foreign bank. Key words: banking sector, profitability, panel data, ownership, operational efficiency.

Leventis, Stergios, prof.

Sikalidis, Alexandros, dr.

ihu