Political partisanship and state-level bank efficiency

Nguyen, T. ORCID: 0000-0002-2258-900X, Cheah, J. ORCID: 0000-0003-2953-3815, Mistra, T. and Johan, S., 2024. Political partisanship and state-level bank efficiency. In: 2nd Contemporary Issues in Financial Markets and Banking Online Conference, Online, 17-18 January 2024.

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We explore the intricate connection between political partisanship and commercial bank efficiency in the United States from 1972 to 2020 to assess the persistent influence of political affiliations on bank efficiency at the state and District of Columbia levels. To do so, we calculate bank efficiency scores using a double bootstrapped method and employ a spatial dynamic panel framework with Tobit modeling, controlling for various factors in the banking and real economy sectors. Our analysis highlights the significant impact of U.S. state and national elections on interdependent bank efficiency scores, robustly supporting the "partisan theory" and its role in shaping U.S. bank efficiency over five decades. Furthermore, we provide compelling evidence that Democratic victories at both state and national levels tend to improve state-level bank efficiency, even after considering bank-specific variables. Additionally, changing the political party in power every four years could enhance the efficiency of the U.S. banking system.

Item Type: Conference contribution
Creators: Nguyen, T., Cheah, J., Mistra, T. and Johan, S.
Date: January 2024
Divisions: Schools > Nottingham Business School
Record created by: Jonathan Gallacher
Date Added: 25 Jan 2024 11:43
Last Modified: 25 Jan 2024 11:43
Related URLs:
URI: https://irep.ntu.ac.uk/id/eprint/50750

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