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Ownership Structure and Bank Performance: Evidence from the Middle East and North Africa

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  • Nada Kobeissi

    () (Department of Management, Long Island University)

Abstract

This paper makes a strong contribution to business literature by investigating the effects of organizational form and ownership structure on firm performance. The paper traces the ownership details of 249 banks in 20 Middle Eastern and North African countries (MENA), with a total of 567 observations during the sample years of 2000-2002. The results reveal that private banks, especially banks with substantial foreign private ownership, perform significantly better than all other sample bank groups. Government banks have the weakest performance and substantially lag behind other sample bank groups. Banks involved in the stock exchanges and banks with foreign ownership within the MENA region perform well in most estimations. Importantly, the evidence shows that the extent of the overall presence of foreign banks in a given country is associated with better performance of individual banks. An additional robustness check shows that findings are strong and consistent even after adjusting for time and country differences among the sample banks. In summary, the findings of this paper highlight a sector of the MENA economy rarely investigated in such detail in the past despite its tremendous importance in the development process. It also reveals that the combined effort of domestic and foreign investors is beneficial to firm performance and growth.

Suggested Citation

  • Nada Kobeissi, 2004. "Ownership Structure and Bank Performance: Evidence from the Middle East and North Africa," Working Papers 0413, Economic Research Forum, revised 06 Mar 2004.
  • Handle: RePEc:erg:wpaper:0413
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    References listed on IDEAS

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    Cited by:

    1. Sonda Marrakchi Chtourou & Sana Ben Hassine, 2006. "Impact de la mise en places des comit├ęs d'audit dans les banques tunisiennes," Post-Print halshs-00548104, HAL.
    2. Mahmoud Haddad & Sam Hakim, 2010. "Have Foreign Banks Contributed to the Spread of the Global Financial Crisis to Saudi Arabia?," Working Papers 537, Economic Research Forum, revised 08 Jan 2010.
    3. Sulaiman Al-Abduljader & Imad Moosa, 2007. "A Test of the News Model of Stock Price Determination in an Emerging Market: The Case of Kuwait," Working Papers 710, Economic Research Forum, revised 01 Jan 2007.
    4. Saito, Jun, 2016. "Boards of directors and bank performance in United Arab Emirates," IDE Discussion Papers 583, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    5. repec:ers:journl:v:xx:y:2017:i:2a:p:538-567 is not listed on IDEAS
    6. repec:eco:journ1:2018-03-25 is not listed on IDEAS

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