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The impact of state and foreign ownership on banking risk: Evidence from the MENA countries

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  • Lassoued, Naima
  • Sassi, Houda
  • Ben Rejeb Attia, Mouna

Abstract

This paper investigates the impact of foreign and state ownership on banking risk. Panel data regression analysis is applied to a sample of 171 commercial banks from the MENA region during the 2006–2012 period. Two-stage least-squares analysis is conducted. Our results show that State ownership encourages banks to take more risks while foreign ownership reduces risk-taking. In addition, state-owned banks tend to increase capital adequacy ratio to hedge against high level of risk. Our finding also indicates that all categories of shareholders take a prudent attitude that influences risk reduction after the 2008 crisis.

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  • Lassoued, Naima & Sassi, Houda & Ben Rejeb Attia, Mouna, 2016. "The impact of state and foreign ownership on banking risk: Evidence from the MENA countries," Research in International Business and Finance, Elsevier, vol. 36(C), pages 167-178.
    • Handle: RePEc:eee:riibaf:v:36:y:2016:i:c:p:167-178
    DOI: 10.1016/j.ribaf.2015.09.014
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