Open AccessLiquidity Risk and Bank Performance: An Empirical Test for Tunisian Banks
Author(s) -
Abdelaziz Hakimi,
Khemais Zaghdoudi
Publication year - 2017
Publication title -
business and economic research
Language(s) - English
Resource type - Journals
ISSN - 2162-4860
DOI - 10.5296/ber.v7i1.10524
Subject(s) - market liquidity , liquidity risk , panel data , business , financial system , credit risk , sample (material) , inflation (cosmology) , monetary economics , economics , finance , econometrics , chemistry , physics , chromatography , theoretical physics
An important part of banking literature was interested in the relationship between credit risk and bank performance. However, only few studies investigated the association between liquidity risk and bank performance. The aim of this paper is to study the effect of liquidity risk on the Tunisian bank performance. To this end, we used a sample of 10 Tunisian banks over the period 1990-2013. By applying panel data method, precisely random effect regression, results show that liquidity risk decreases significantly Tunisian bank performance. Also, findings indicate that international financial crisis and inflation act negatively and significantly on bank performance.