The Impact of Electoral Factors on Commercial Banks in CEE Countries

Wharton Financial Institutions Center Working Paper No. 11-02

42 Pages Posted: 9 Jan 2011 Last revised: 13 Jun 2011

See all articles by Krzysztof Jackowicz

Krzysztof Jackowicz

Kozminski University

Oskar Kowalewski

IESEG School of Management; LEM - CNRS 9221

Łukasz Kozłowski

Kozminski University

Date Written: January 6, 2011

Abstract

This study analyses the impact of political factors on commercial banks’ behaviour and performance in 11 CEE countries between 1992 and 2008. Using a unique dataset of commercial banks and electoral factors, we find that state-owned banks show significantly smaller net interest income ratios during the years of parliamentary elections and during preceding years. The decrease in profitability of state-owned banks is caused primarily by lower interest rates charged on loans. In contrast, we document that the results concerning political determinants of credit growth are inconclusive. Hence, this study supports, to some extent, the view that state-owned banks constitute a tool serving political goals in CEE countries.

Keywords: banking, politics, performance, ownership, transition countries

JEL Classification: G21, G28

Suggested Citation

Jackowicz, Krzysztof and Kowalewski, Oskar and Kozłowski, Łukasz, The Impact of Electoral Factors on Commercial Banks in CEE Countries (January 6, 2011). Wharton Financial Institutions Center Working Paper No. 11-02, Available at SSRN: https://ssrn.com/abstract=1736289 or http://dx.doi.org/10.2139/ssrn.1736289

Krzysztof Jackowicz (Contact Author)

Kozminski University ( email )

ul. JagielloDska 57/59
Warsaw, 03-303
Poland

Oskar Kowalewski

IESEG School of Management ( email )

1 Parvis de La Défense
Socle de la Grande Arche
Paris La Défense cedex, 92044
France

HOME PAGE: http://www.ieseg.fr/en/faculty-and-research/professor/?id=1740

LEM - CNRS 9221 ( email )

Lille
France

HOME PAGE: http://lem.cnrs.fr/

Łukasz Kozłowski

Kozminski University ( email )

ul. Jagiellońska 57/59
Warsaw, Mazowieckie 03-301
Poland

HOME PAGE: http://www.kozminski.edu.pl

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