Financial Liberalization and Banking Profitability: A Panel Data Analysis for Tunisian Banks
Abdelaziz Hakimi, Helmi Hamdi, Mouldi Djelassi
Abstract
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Abdelaziz Hakimi, Helmi Hamdi, Mouldi Djelassi
Abstract
Open-access reader
The financial liberalization policy was implemented in several countries in order to have a modern and a dynamic financial sector and to boost economic growth. However, the consequences of this program diverge from one country to another one. In this paper, we focus our attention to the Tunisian case study. To this end, we collected data from 9 banks over the period 1980-2006, and we employed the panel data analysis. The results of our study show a negative and significant relationship between financial liberalization and banking profitability. This shows that liberalization has harmed the domestic banking system.
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The financial liberalization policy was implemented in several countries in order to have a modern and a dynamic financial sector and to boost economic growth. However, the consequences of this program diverge from one country to another one. In this paper, we focus our attention to the Tunisian case study. To this end, we collected data from 9 banks over the period 1980-2006, and we employed the panel data analysis. The results of our study show a negative and significant relationship between financial liberalization and banking profitability. This shows that liberalization has harmed the domestic banking system.
Key concepts: Profitability index, Liberalization, Panel data, Financial system, Financial sector, Business, Order (exchange), Panel analysis