Determinants of Managerial Behaviour in the Tunisian Banking Industry

ZAGHLA Abdessalem; BOUJELBENE Younes

doi:doi:10.11648/j.ijefm.20130106.21

| Peer-Reviewed

Determinants of Managerial Behaviour in the Tunisian Banking Industry

ZAGHLA Abdessalem, BOUJELBENE Younes

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)

Received: 31 August 2013 Accepted: Published: 20 November 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.

Published in	International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)
DOI	10.11648/j.ijefm.20130106.21
Page(s)	335-346
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Cost/Profit Efficiency, Granger Causality, Stochastic Frontier Analysis, Managerial Behavior

References

[1]	Allen, J. et Liu, Y. 2007. "Efficiency and economies of scale of large Candian banks’’ Canadian Journal of Economics, 40 (1): 225-244.
[2]	Altunbas, Y., Evans, L., et Molyneux, P. 2001. "Bank ownership and efficiency." Journal of Money, Credit, and Banking, 33 (4): 926–954.
[3]	Aly, Hassan Y., Richard Grabowski, Carl Pasurka, et Nanda Rangan. 1990. "Technical, scale, and allocative efficiecncies in US banking: an empirical investigation." The Review of Economics and Statistics, 72 (2): 211-18.
[4]	Arellano M., et Bond, S. 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations." Review of Economic Studies, 58: 277-297.
[5]	Arellano M., et Bover, S. 1995. "Another Look at the Instrumental Variable Estimation of Error-Components Models." Journal of Econometrics, 68: 29-51.
[6]	Berger, A. N., 1995. "The relationship between capital and earnings." Journal of Money, Credit, and Banking, 27: 432-456.
[7]	Berger, A.N. et Mester, L.J. 1997. "Inside the black box: What explains differences in the efficiencies of financial institutions?" Journal of Banking and Finance, 21: 895–947.
[8]	Berger, A.N., DeYoung, R. 1997. "Problem loans and cost efficiency in commercial banks." Journal of Banking and Finance, 21: 849-870.
[9]	Berger, A.N., Humphrey, D.B. 1997. "Efficiency of financial institutions: International survey and directions for future research." European Journal of Operational Research, 98 (2): 175–212.
[10]	Bonin, J. P., Hasan, I., et Wachtel, P. 2005. "Bank performance, efficiency and ownership in Transition Countries." Journal of Banking and Finance, 29: 31-53.
[11]	Bos, J.W.B. et Kool, C.J.M. 2006. ‘‘Bank efficiency: The role of bank strategy and local market conditions.’’ Journal of Banking and Finance, 30: 1953-1974.
[12]	Button, K.J., Weyman-Jones, T.G. 1992. "Ownership structure, institutional organisation and measured X-efficiency." The American Economic Review, 82 (2): 439–445.
[13]	Cebenoyan, A.S., Cooperman, E.S., Register, C.A., et Hudgins, S.C. 1993. "The relative efficiency of stock versus mutual S&Ls: A stochastic cost frontier approach." Journal of Financial Services Research, 7: 151–170.
[14]	Chaffai, M.E. 1997. "Estimating input specific technical inefficiency: The case of the Tunisian banking industry." European Journal of Operational Research, 98(2): 314-331.
[15]	Chaffai, M.E. et Dietsch, M. 1998. "Productive efficiency performances of Tunisian and Moroccan banks: an econometric analysis using panel data." Paper presented at the ERF Fourth annual conference, Beirut 7-9 September.
[16]	DeYoung, R., Sprong, K., et Sullivan, R.J., 2001. "Who’s minding the store? Motivating and monitoring hired managers at small closely held commercial banks." Journal of Banking and Finance, 25: 1209-1244.
[17]	Dietsch, M. and Lozano-Vivas, A. 2000. ‘‘How the environment determines banking efficiency: A comparison between French and Spanish industries.’’ Journal of Banking and Finance, 24: 985-1004
[18]	Fries, S., Taci, A. 2005. "Cost efficiency of banks in transition: evidence from 289 banks in 15 post-communist countries." Journal of Banking and Finance, 29: 55-81.
[19]	Hasan, I., et Marton, K., 2003. "Development and efficiency of the banking sector in a transitional economy: Hungarian experience." Journal of Banking and Finance, 27: 2249-2271.
[20]	Isik .I, Lokman Gunduz and Mohammed Omran. 2005. "Impacts of Organizational Forms, Stock Performance and Foreign Ownership on Bank Efficiency in Jordan: A Panel Study Approach." Communication à l’Economic Research Forum.
[21]	Isik, I. et Hassan, M.K. 2003. "Efficiency, ownership and market structure, corporate control and governance in the Turkish banking industry." Journal of Business Finance and Accounting, 30: 1363-1421.
[22]	Mester, L.J. 1996. "A study of banking efficiency taking into account risk-preferences." Journal of Banking and Finance, 20: 1025-1045.
[23]	Rossi, S., Schwaiger, M., Winkler, G. 2005. "Managerial behaviour and cost/profit efficiency in the Banking Sectors of Central and Eastern European Countries." Working Paper N°96, Austrian National Bank, http://www.oenb.at.
[24]	Weill, L., 2003. "Banking efficiency in transition economies: the role of foreign ownership." Economics of Transition, 11 (3): 569-592.
[25]	Weill, L., 2004. "Is there a lasting gap in Banking efficiency between Eastern and Western European Countries?" LARGE, Université Robert Schuman, Institut d´Etudes Politiques, Strasbourg (mimeo)
[26]	Weill, L., et Podpiera, J. 2008. "Bad luck or bad management? Emerging banking market experience." Journal of Financial Stability, 4: 135–148.
[27]	Williams, J. 2004. "Determining management behaviour in European Banking." Journal of Banking and Finance, 28: 2427-2460.

Cite This Article

Plain Text BibTeX RIS

APA Style

ZAGHLA Abdessalem, BOUJELBENE Younes. (2013). Determinants of Managerial Behaviour in the Tunisian Banking Industry. International Journal of Economics, Finance and Management Sciences, 1(6), 335-346. https://doi.org/10.11648/j.ijefm.20130106.21

Copy | Download

ACS Style

ZAGHLA Abdessalem; BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 335-346. doi: 10.11648/j.ijefm.20130106.21

Copy | Download

AMA Style

ZAGHLA Abdessalem, BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int J Econ Finance Manag Sci. 2013;1(6):335-346. doi: 10.11648/j.ijefm.20130106.21

Copy | Download

@article{10.11648/j.ijefm.20130106.21,
  author = {ZAGHLA Abdessalem and BOUJELBENE Younes},
  title = {Determinants of Managerial Behaviour in the Tunisian Banking Industry},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {335-346},
  doi = {10.11648/j.ijefm.20130106.21},
  url = {https://doi.org/10.11648/j.ijefm.20130106.21},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.21},
  abstract = {This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Managerial Behaviour in the Tunisian Banking Industry
AU  - ZAGHLA Abdessalem
AU  - BOUJELBENE Younes
Y1  - 2013/11/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130106.21
DO  - 10.11648/j.ijefm.20130106.21
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 335
EP  - 346
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130106.21
AB  - This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.
VL  - 1
IS  - 6
ER  -

Copy | Download

Author Information

ZAGHLA Abdessalem

Finance at the Higher Institute of Business Administration of Sfax
BOUJELBENE Younes

Quantitative Methods and Director of the Higher Institute of Business Administration of Sfax

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

ZAGHLA Abdessalem, BOUJELBENE Younes. (2013). Determinants of Managerial Behaviour in the Tunisian Banking Industry. International Journal of Economics, Finance and Management Sciences, 1(6), 335-346. https://doi.org/10.11648/j.ijefm.20130106.21

Copy | Download

ACS Style

ZAGHLA Abdessalem; BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 335-346. doi: 10.11648/j.ijefm.20130106.21

Copy | Download

AMA Style

ZAGHLA Abdessalem, BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int J Econ Finance Manag Sci. 2013;1(6):335-346. doi: 10.11648/j.ijefm.20130106.21

Copy | Download

@article{10.11648/j.ijefm.20130106.21,
  author = {ZAGHLA Abdessalem and BOUJELBENE Younes},
  title = {Determinants of Managerial Behaviour in the Tunisian Banking Industry},
  journal = {International Journal of Economics, Finance and Management Sciences},
  volume = {1},
  number = {6},
  pages = {335-346},
  doi = {10.11648/j.ijefm.20130106.21},
  url = {https://doi.org/10.11648/j.ijefm.20130106.21},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.21},
  abstract = {This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Determinants of Managerial Behaviour in the Tunisian Banking Industry
AU  - ZAGHLA Abdessalem
AU  - BOUJELBENE Younes
Y1  - 2013/11/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijefm.20130106.21
DO  - 10.11648/j.ijefm.20130106.21
T2  - International Journal of Economics, Finance and Management Sciences
JF  - International Journal of Economics, Finance and Management Sciences
JO  - International Journal of Economics, Finance and Management Sciences
SP  - 335
EP  - 346
PB  - Science Publishing Group
SN  - 2326-9561
UR  - https://doi.org/10.11648/j.ijefm.20130106.21
AB  - This paper determines management behaviour for Tunisian banking industry between 1989 and 2006. Following the Granger causality, we examine the intertemporal relationships between bank efficiency, loan loss provision and capitalisation. The possible relationships between the variables imply different modes of management behaviour namely bad management, bad luck, skimping, and moral hazard behaviour. We extend the Granger causality model developed by Berger and DeYoung (1997) by applying G.M.M dynamic panel estimators on a panel of Tunisian commercial banks. The econometric results suggest that the intertemporal relationships between the loan loss provision and productive efficiency are checked in only one direction. Our data provide evidence for the bad luck hypothesis suggesting the exogeneity of bad loans triggering inefficiency. In addition, we find no evidence of bad management hypothesis for the Tunisian commercial banks. Thus, these banks adopted a skimping behaviour over 1989-2006 period. Finally, the moral hazard behaviour, according to which the managers of the thinly capitalised banks assume additional portfolio risk, was identified in the context of the Tunisian banks.
VL  - 1
IS  - 6
ER  -

Copy | Download