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How Did State-Owned Banks Respond To Privatization? Evidence From The Indian Experiment

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  • Saibal Ghosh

Abstract

The paper examines the response of banks to privatization. Using data on all state-owned banks for the period 1990-2006, the findings indicate that fully state-owned banks are significantly less profitable than partially privatized ones. The improvements in performance by partially privatized banks are, in fact, sustained after privatization. In addition, the analysis indicates that privatization improves profitability, efficiency and improves bank soundness, while lowering bank risk. While the improvement in bank risk is typically spread out over a much longer period, the progress in terms of profitability and economic efficiency typically occurs in the post-privatization period. Copyright � 2010 The Author Journal compilation � CIRIEC 2010.

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Article provided by Wiley Blackwell in its journal Annals of Public and Cooperative Economics.

Volume (Year): 81 (2010)
Issue (Month): 3 (09)
Pages: 389-421

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Handle: RePEc:bla:annpce:v:81:y:2010:i:3:p:389-421

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