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Bank Efficiency and Foreign Ownership in the Lebanese Banking Sector

Author

Listed:
  • Awdeh Ali

    (Lebanese International University)

  • El Moussawi Chawki

    (Lebanese University)

Abstract
We have compared the efficiency of banks with majority domestic ownership, banks with majority foreign ownership, and the subsidiaries of foreign banks operating in the Lebanese market between 1996 and 2005. We have implemented the DEA methodology to calculate the yearly scores for technical, allocative, and cost efficiencies for the three groups of banks. Moreover, we have extended our study to reveal the factors that shape bank efficiency, by proposing several micro and macroeconomic variables and testing their correlation with this efficiency.Firstly, our results did not prove significant differences between the efficiency of the three groups of banks. However, the evolution of the efficiency scores over the period under study shows an improvement in the performance of banks with majority foreign ownership, but some deterioration in the performance of banks with majority domestic ownership and the subsidiaries of foreign banks.Secondly, and with respect to the factors affecting bank efficiency, we found that the employed variables have different impacts according to groups, which may confirm that bank efficiency is differently determined, according to bank ownership.

Suggested Citation

  • Awdeh Ali & El Moussawi Chawki, 2009. "Bank Efficiency and Foreign Ownership in the Lebanese Banking Sector," Review of Middle East Economics and Finance, De Gruyter, vol. 5(2), pages 66-87, September.
    • Handle: RePEc:bpj:rmeecf:v:5:y:2009:i:2:n:4
    DOI: 10.2202/1475-3693.1161
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    Cited by:

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    2. Nicholas Apergis & Effrosyni Alevizopoulou, 2011. "Bank Efficiency: Evidence from a Panel of European Banks," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(3), pages 329-341, September.
    3. Awdeh, Ali & EL-Moussawi, Chawki, 2011. "Analysing the Motives and the Outcomes of Bank Mergers," MPRA Paper 119120, University Library of Munich, Germany.
    4. Jill Johnes & Marwan Izzeldin & Vasileios Pappas, 2012. "A comparison of performance of Islamic and conventional banks 2004 to 2009," Working Papers 12893801, Lancaster University Management School, Economics Department.
    5. Mouna Abdelhedi-Zouch & Achraf Ghorbel, 2016. "Islamic and conventional bank market value: Manager behavior and investor sentiment," Cogent Business & Management, Taylor & Francis Journals, vol. 3(1), pages 1164010-116, December.

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