Determinants of Managerial Behaviour in the Tunisian Banking Industry
International Journal of Economics, Finance and Management Sciences
Volume 1, Issue 6, December 2013, Pages: 335-346
Received: Aug. 31, 2013; Published: Nov. 20, 2013
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Authors
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
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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.
Keywords
Cost/Profit Efficiency, Granger Causality, Stochastic Frontier Analysis, Managerial Behavior
To cite this article
ZAGHLA Abdessalem, BOUJELBENE Younes, Determinants of Managerial Behaviour in the Tunisian Banking Industry, International Journal of Economics, Finance and Management Sciences. Vol. 1, No. 6, 2013, pp. 335-346. doi: 10.11648/j.ijefm.20130106.21
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