Naslov
Profit Persistence and Determinants of Bank Profitability in Croatia

Autori
Pervan, Maja ; Pelivan Iva ; Arnerić, Josip

Izvornik
Ekonomska istraživanja (1331-677X) 28 (2015), 1; 284-298

Vrsta, podvrsta i kategorija rada
Radovi u časopisima, članak, znanstveni

Ključne riječi
profit persistence ; profitability determinants ; dynamic panel model ; Markov Chain

Sažetak
The aim of this research was to determine the persistence of profit in an emerging banking sector of the Republic of Croatia. Most developing countries have experienced common changes within restructuring of the banking system and therefore, this issue has become crucial especially after comparing poor empirical findings in these countries to the findings of developed countries. However, research related to this issue is non-existent in the Croatian banking sector. Moreover, among few studies that were carried out on the territory of the Central and Eastern European banking markets, neither study have analyzed the persistence of profit in terms of Markov Chain stochastic process, which has proved to be suitable in analysis of transition between different states, i.e. classes of profitability, according to Markov property. In addition to the profit persistence analysis, authors defined and estimated a model that would enable the identification of the profitability determinants of Croatian banks. In this sense, the model incorporated three groups of profitability determinants: bank-specific, industry-specific and macroeconomic. The variables with a statistically significant impact on the profitability of banks were identified using a dynamic panel model, while the application of the Markov Chains stochastic process revealed that profit persistence was less likely to occur in banks with higher profit.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA