The Impact of Risk Taking and Institutional Quality on MENA Region Banking Performance

El Hokayem, Elie M. (2024) The Impact of Risk Taking and Institutional Quality on MENA Region Banking Performance. International Business Research, 17 (1). p. 32. ISSN 1913-9004

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Abstract

This study analyzes banking profitability by examining the impact of bank risk taking and institutional quality on the performance of banks operating in the MENA region between 1999 and 2021. Using the generalized method of moments (GMM) panel data estimator, we identify that banking performance is influenced by specific-bank variables, country-level macroeconomic variables, and the quality of institutions. Our findings demonstrate that an increase in the capital requirement ratio and banks' size has a positive impact on the Return on Assets ratio (ROA), while the Non-Performing Loans to Gross Loans ratio (NPL) and Liquidity (LIQ) have a negative effect on banking performance. It is evident that banks under study expand their interest rates in line with economic growth and high inflation rates, negatively influencing banking performance. Additionally, we find that control of corruption and political stability leads to an increase in banking profitability, whereas the rule of law negatively affects banking profitability.

Item Type: Article
Subjects: Impact Archive > Social Sciences and Humanities
Depositing User: Managing Editor
Date Deposited: 11 Apr 2024 11:20
Last Modified: 11 Apr 2024 11:20
URI: http://research.sdpublishers.net/id/eprint/4039

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