Are European Banks in Economic Harmonay? An HLM Aproach
A reduced-form equation relating the log of the capital account ratio to several micro and macro variables, particularly the profitability variable, for the commercial banks in nine European countries over eleven years, 1991-2001, was constructed. The equation consisted of a fixed-effects part and a random-effects part. The Hierarchical Linear Model (HLM) approach was used to test the harmonization hypothesis relating the capital account ratio to the profit rate across the countries and over the years. The statistical results indicated that while some differences in bank behavior as indicated by the intercept and slope deviations across countries and over years did exist, by and large, most of the differences or deviations from the fixed-effects means were not significantly different from zero. The harmonization hypothesis was accepted. European bank behavior gave evidence of being in harmony and uniform over countries and years. Some policy implications are discussed briefly.
|Date of creation:||2012|
|Contact details of provider:|| Postal: 1645 E. Central Campus Dr. Front, Salt Lake City, UT 84112-9300|
Phone: (801) 581-7481
Fax: (801) 585-5649
Web page: http://economics.utah.edu
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jokipii, Terhi & Milne, Alistair, 2008.
"The cyclical behaviour of European bank capital buffers,"
Journal of Banking & Finance,
Elsevier, vol. 32(8), pages 1440-1451, August.
- Jokipii, Terhi & Milne, Alistair, 2007. "The Cyclical Behaviour of European Bank Capital Buffers," SIFR Research Report Series 56, Institute for Financial Research.
- Dong, Minyue & Stettler, Alfred, 2011. "Estimating firm-level and country-level effects in cross-sectional analyses: An application of hierarchical modeling in corporate disclosure studies," The International Journal of Accounting, Elsevier, vol. 46(3), pages 271-303, September.
- Allen, Franklin & Santomero, Anthony M., 1997. "The theory of financial intermediation," Journal of Banking & Finance, Elsevier, vol. 21(11-12), pages 1461-1485, December.
- Franklin Allen & Anthony M. Santomero, 1996. "The Theory of Financial Intermediation," Center for Financial Institutions Working Papers 96-32, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Singer, David Andrew, 2004. "Capital Rules: The Domestic Politics of International Regulatory Harmonization," International Organization, Cambridge University Press, vol. 58(03), pages 531-565, July. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:uta:papers:2012_03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.