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The Uniform Relationship Between Managerial Ability And Bank Loan Quality: Does It Hold? Evidence From Quantile Regressions

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  • Sedki Zaiane

    (National Research University Higher School of Economics)

  • Maria Semenova

    (National Research University Higher School of Economics)

Abstract

This study examines the relationship between managerial ability (MA) and bank loan quality, employing a quantile regression model. It analyzes whether the impact of MA on loan quality changes across various quantiles of risk. Using a sample of 126 MENA banks (2006–2020), the results reveal that the impact of MA on bank loan quality varies across loan quality quantiles. Using non-performing loans (NPLs) as a loan quality measure, we find that MA reduces NPLs at moderate quantile levels. This relation becomes inverse at higher level of NPLs. Our findings are strengthened by a quantile-on-quantile regression. These results add to the literature by providing insight between MA and bank loan quality using a non-monotonic methodology.

Suggested Citation

  • Sedki Zaiane & Maria Semenova, 2025. "The Uniform Relationship Between Managerial Ability And Bank Loan Quality: Does It Hold? Evidence From Quantile Regressions," HSE Working papers WP BRP 96/FE/2025, National Research University Higher School of Economics.
    • Handle: RePEc:hig:wpaper:96/fe/2025
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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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