Are Public Sector Banks in India a Government Failure? A Comparative Empirical Analysis of Public Sector and Private Sector Banks
Are Public Sector Banks in India a Government Failure? A Comparative Empirical Analysis of Public Sector and Private Sector Banks
Author(s): Sahil ChopraSubject(s): Business Economy / Management, Accounting - Business Administration
Published by: Szkoła Główna Handlowa w Warszawie
Keywords: government failure; empirical analysis; public sector banks; panel data; pooled OLS model;
Summary/Abstract: This paper seeks to examine the relation between banks’ profitability and ownership in India. The justification to measure the impact of ownership comes from the theory of government failure. An independently constructed dataset containing all commercial public and private sector banks in India as of April 2020 is used. The data ranges from 2004 to 2020. Banks’ characteristics are collected from respective banks’ websites, and the hypotheses are tested by estimating an econometric model, i.e., the pooled OLS model. In conclusion, the government owned banks’ performance is inferior compared to private banks. This can be accredited to the huge amount of loans sanctioned in priority sectors and fraudulent cases due to the presence of interest groups, corruption, and inefficiency of employees in public sectors.
Journal: Analizy i Studia CASP
- Issue Year: 14/2022
- Issue No: 2
- Page Range: 41-53
- Page Count: 13
- Language: English
