Examining the relationship between bank profitability and economic growth: insights from Central and Eastern Europe

Kjosevski, Jordan (2024) Examining the relationship between bank profitability and economic growth: insights from Central and Eastern Europe. Bank i Kredyt, 55 (2). pp. 1-20.

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Abstract

In this research article, we delve into the influence of bank profitability on the economic growth
of 16 countries in Central and Eastern Europe over the period spanning from 1999 to 2022. While
low levels of bank profitability are often seen as a potential threat to economic growth, the question
of whether higher profitability contributes positively to growth remains unanswered. Our extensive
empirical analysis, utilizing various econometric methods, consistently reveals a statistically and
economically significant positive relationship. Specifically, a one percent increase in the return on
assets of banks is associated with a notable increase in economic growth, falling within the range
of 0.575 to 0.603 percentage points. In addition to these significant findings, future research could delve
deeper into the nuanced relationships between different dimensions of bank profitability and economic
performance, including the effects of varying ownership structures and competition dynamics.

Item Type:	Article
Subjects:	Scientific Fields (Frascati) > Social Sciences > Economics and Business
Depositing User:	UKLO Mrezha
Date Deposited:	27 May 2024 05:57
Last Modified:	27 May 2024 05:57
URI:	https://eprints.uklo.edu.mk/id/eprint/9973

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