Does regulation improve bank peroformance in South and East Asia?

Mamatzakis, Emmanuel and Hu, Wentao (2014): Does regulation improve bank peroformance in South and East Asia?

Abstract

In this paper, we utilize stochastic frontier analysis to estimate the impact of the regulations and institutions on bank efficiency through analyzing 389 savings and commercial banks in 11 Asian countries during the period 2000-2012. We find that activity restriction, capital requirement, official supervisory and private monitoring have a positive impact on bank performance. Furthermore, a wholesome institutional environment with powerful government, low corruption and strict law can enhance bank inefficiency. Our results suggest that banking regulations can improve bank performance with high quality of the institutional environment.

• Item Type: MPRA Paper
• Language: English
• Keywords: Bank efficiency, regulations, institutions.
• Subjects: G - Financial Economics > G0 - General; G - Financial Economics > G0 - General > G00 - General; G - Financial Economics > G1 - General Financial Markets; G - Financial Economics > G1 - General Financial Markets > G18 - Government Policy and Regulation

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