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Determinants of bank profitability in Tunisia: does corruption matter?

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  • Khemaies Bougatef

Abstract

Purpose - In this paper, the author aims to examine the effect of perceived level of corruption on bank profitability. Design/methodology/approach - The analysis is based on a balanced panel of ten commercial banks in Tunisia over the period 2003-2014. The author uses the generalized method of moments estimator technique described by Arellano and Bover (1995). Findings - The author finds a positive relationship between the bank profitability and the corruption level. This surprising result suggests that Tunisian commercial banks take advantage from the high level of corruption. Regarding the others determinants, the findings reveal that bank profitability is positively related to capitalization level and liquidity. By contrast, a low asset quality is associated with low profitability. Originality/value - The novelty of this study consists in the inclusion of the corruption level as a determinant of bank profitability.

Suggested Citation

  • Khemaies Bougatef, 2017. "Determinants of bank profitability in Tunisia: does corruption matter?," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 20(1), pages 70-78, January.
    • Handle: RePEc:eme:jmlcpp:jmlc-10-2015-0044
    DOI: 10.1108/JMLC-10-2015-0044
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    Citations

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    Cited by:

    1. Taslima Akther & Mushfiqur Rahman & Md. Mufidur Rahman, 2023. "Factors influencing commercial bank profitability in Bangladesh: a panel data approach," Future Business Journal, Springer, vol. 9(1), pages 1-20, December.
    2. Ameet Kumar & Khalid Ahmed & Mujeeb‐u‐Rehman Bhayo & Muhammad Ramzan Kalhoro, 2023. "Banking performance and institutional quality: Evidence from dynamic panel data analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4717-4737, October.
    3. Abdulai, Shirazu Kuvidana & Umar, Siisu, 2022. "The Impact of Capital Adequacy and Bank Size on Profitability of Ghanaian Banks," MPRA Paper 122478, University Library of Munich, Germany, revised 2022.
    4. Samia Nasreen & Mehwish Gulzar & Muhammad Afzal & Muhammad Umar Farooq, 2024. "The Role of Corruption, Transparency, and Regulations on Asian Banks’ Performance: An Empirical Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 6475-6506, June.
    5. Heri Sudarsono & Fiqih Afriadi & Siti Aisiyah Suciningtias, 2021. "Do stability and size affect the profitability of Islamic rural bank in Indonesia?," Jurnal Ekonomi & Keuangan Islam, Faculty of Economics, Universitas Islam Indonesia, vol. 7(2), pages 161-174.

    More about this item

    Keywords

    Commercial banks; Bank profitability; Corruption; Dynamic panel data; G21; C33;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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