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Determinants of Managerial Behaviour in the Tunisian Banking Industry

Received: 31 August 2013     Published: 20 November 2013
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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.

Published in International Journal of Economics, Finance and Management Sciences (Volume 1, Issue 6)
DOI 10.11648/j.ijefm.20130106.21
Page(s) 335-346
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Cost/Profit Efficiency, Granger Causality, Stochastic Frontier Analysis, Managerial Behavior

References
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[17] Dietsch, M. and Lozano-Vivas, A. 2000. ‘‘How the environment determines banking efficiency: A comparison between French and Spanish industries.’’ Journal of Banking and Finance, 24: 985-1004
[18] Fries, S., Taci, A. 2005. "Cost efficiency of banks in transition: evidence from 289 banks in 15 post-communist countries." Journal of Banking and Finance, 29: 55-81.
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[20] Isik .I, Lokman Gunduz and Mohammed Omran. 2005. "Impacts of Organizational Forms, Stock Performance and Foreign Ownership on Bank Efficiency in Jordan: A Panel Study Approach." Communication à l’Economic Research Forum.
[21] Isik, I. et Hassan, M.K. 2003. "Efficiency, ownership and market structure, corporate control and governance in the Turkish banking industry." Journal of Business Finance and Accounting, 30: 1363-1421.
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Cite This Article
  • APA Style

    ZAGHLA Abdessalem, BOUJELBENE Younes. (2013). Determinants of Managerial Behaviour in the Tunisian Banking Industry. International Journal of Economics, Finance and Management Sciences, 1(6), 335-346. https://doi.org/10.11648/j.ijefm.20130106.21

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    ACS Style

    ZAGHLA Abdessalem; BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int. J. Econ. Finance Manag. Sci. 2013, 1(6), 335-346. doi: 10.11648/j.ijefm.20130106.21

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    AMA Style

    ZAGHLA Abdessalem, BOUJELBENE Younes. Determinants of Managerial Behaviour in the Tunisian Banking Industry. Int J Econ Finance Manag Sci. 2013;1(6):335-346. doi: 10.11648/j.ijefm.20130106.21

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  • @article{10.11648/j.ijefm.20130106.21,
      author = {ZAGHLA Abdessalem and BOUJELBENE Younes},
      title = {Determinants of Managerial Behaviour in the Tunisian Banking Industry},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {1},
      number = {6},
      pages = {335-346},
      doi = {10.11648/j.ijefm.20130106.21},
      url = {https://doi.org/10.11648/j.ijefm.20130106.21},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20130106.21},
      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.},
     year = {2013}
    }
    

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  • TY  - JOUR
    T1  - Determinants of Managerial Behaviour in the Tunisian Banking Industry
    AU  - ZAGHLA Abdessalem
    AU  - BOUJELBENE Younes
    Y1  - 2013/11/20
    PY  - 2013
    N1  - https://doi.org/10.11648/j.ijefm.20130106.21
    DO  - 10.11648/j.ijefm.20130106.21
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
    SP  - 335
    EP  - 346
    PB  - Science Publishing Group
    SN  - 2326-9561
    UR  - https://doi.org/10.11648/j.ijefm.20130106.21
    AB  - 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.
    VL  - 1
    IS  - 6
    ER  - 

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Author Information
  • Finance at the Higher Institute of Business Administration of Sfax

  • Quantitative Methods and Director of the Higher Institute of Business Administration of Sfax

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