IDEAS home Printed from https://ideas.repec.org/a/spr/eurase/v13y2023i3d10.1007_s40822-023-00248-6.html
   My bibliography  Save this article

Bank performance, capital and size: a comparative analysis in MENA and EU

Author

Listed:
  • Marwan Al-Zoubi

    (Al Zaytoonah University of Jordan)

  • Mais Sha’ban

    (Al Zaytoonah University of Jordan)

Abstract

The debate on optimal bank capital and size and their association with bank performance is still ongoing and high on policy makers’ agenda. This study analyzes the impact of capital and size on bank performance for 1053 banks operating in the EU and MENA regions over the period 2009–2020. The results show that capital is an important determinant of bank performance as it is highly significant in both regions; however, banks’ performance in MENA seems to be more responsive to changes in the capital ratios. Further, while bank size has a positive non-linear relationship with profitability in the EU region, it does not seem to have a significant impact in the MENA region. This study contributes to the literature by providing a strong empirical evidence that more capital is associated with higher profitability in regions characterized by different levels of development, contrary to the bankers’ belief that capital is costly. Regulators may find this conclusion to be useful and in line with their objective of boosting bank resilience and performance.

Suggested Citation

  • Marwan Al-Zoubi & Mais Sha’ban, 2023. "Bank performance, capital and size: a comparative analysis in MENA and EU," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 13(3), pages 677-702, December.
    • Handle: RePEc:spr:eurase:v:13:y:2023:i:3:d:10.1007_s40822-023-00248-6
    DOI: 10.1007/s40822-023-00248-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s40822-023-00248-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s40822-023-00248-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Bank performance; Bank capital; Bank size; Comparative analysis; Regional analysis;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:eurase:v:13:y:2023:i:3:d:10.1007_s40822-023-00248-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.