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A model for predicting Inactivity in the European Banking Sector

Author

Listed:
  • Themistokles Lazarides

    (TEI of Western Macedonia, Business Administration (Grevena) Department, Mirsina Grevena, 5100, Greece)

Abstract

Purpose – The paper will addresses the issue of inactivity and will try to detect its causes using econometric models. The Banking sector of Europe has been under transformation or restructuring for almost half a century. Design/methodology/approach – Probit models and descriptive statistics have been used to create a system that predicts inactivity. The data was collected from Bankscope. Findings – The results of the econometric models show that from the six groups of indicators, four have been found to be statistically important (performance, size, ownership, corporate governance). These findings are consistent with the theory. Research limitations/implications – The limitation is that Bankscope does not provide any longitudinal data regarding ownership, management structure and there are some many missing values before 2007 for some of the financial ratios and data. Originality/value – The paper's value and innovation is that it has given a systemic approach to find indicators of inactivity.

Suggested Citation

  • Themistokles Lazarides, 2015. "A model for predicting Inactivity in the European Banking Sector," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 8(1), pages 137-154, August.
    • Handle: RePEc:tei:journl:v:8:y:2015:i:1:p:137-154
    as

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    References listed on IDEAS

    as
    1. Rughoo, Aarti & Sarantis, Nicholas, 2014. "The global financial crisis and integration in European retail banking," Journal of Banking & Finance, Elsevier, vol. 40(C), pages 28-41.
    2. Faccio, Mara & Lang, Larry H. P., 2002. "The ultimate ownership of Western European corporations," Journal of Financial Economics, Elsevier, vol. 65(3), pages 365-395, September.
    3. Becht, Marco, 1999. "European corporate governance: Trading off liquidity against control," European Economic Review, Elsevier, vol. 43(4-6), pages 1071-1083, April.
    4. Asli Demirgüç-Kunt & Enrica Detragiache, 1998. "The Determinants of Banking Crises in Developing and Developed Countries," IMF Staff Papers, Palgrave Macmillan, vol. 45(1), pages 81-109, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Banks; Europe; Inactivity;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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