Bank Survival in European Emerging Markets

We analyze bank survival on large dataset covering 17 European emerging markets during the period of 2007-2015 by estimating the Cox proportional hazards model. We group banks across countries and according to their financial soundness. Our results show that progress in banking reforms positively affects bank survival. The economic impact of various determinants is largest for average banks measured by their soundness. Financial indicators predict bank survival rate with intuitively expected impact that is economically less significant in comparison to other factors. Specifically, ownership structure and legal form are the key economically significant factors that exhibit strongest economic effect on bank survival. We further document importance of banks being listed with respect to their survival. We also show that probability of exit increases after number of directors increases beyond a threshold. The results are robust no matter how bank are grouped, with respect to alternative specifications as well as alternative assumptions on survival distribution.

Institute of Economic Research, Hitotsubashi University

2018-08

English(eng)

technical report

VoR

AA11476336

20

Iwasaki acknowledges financial support from the Japan Securities Scholarship Foundation (JSSF), the Nomura Foundation, and the Mitsubishi Foundation. Kočenda acknowledges support from the Grant Agency of the Czech Republic.

Discussion paper series / Institute of Economic Research, Hitotsubashi University

https://hdl.handle.net/10086/29438