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Does economic freedom fosters banks' performance? panel evidence from Malaysia


Sufian, Fadzlan and Habibullah, Muzafar Shah (2010) Does economic freedom fosters banks' performance? panel evidence from Malaysia. Journal of Contemporary Accounting & Economics, 6 (2). pp. 77-91. ISSN 1815-5669; ESSN: 2352-3298


The present paper provides new empirical evidence on the impact of economic freedom on banks’ performance. The empirical analysis is confined to the Malaysian banking sector during the period of 1999–2007. We find that overall economic freedom and business freedom exerts positive impacts, implying that higher (lower) freedom on the activities that banks can undertake and entrepreneurs to start businesses increases (reduces) banks’ profitability. The empirical findings seem to suggest that corruption has a corrosive impact on Malaysian banks’ profitability. Interestingly, the impact of monetary freedom is negative, demonstrating the importance of government intervention in determining the profitability of banks operating in the Malaysian banking sector.

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Additional Metadata

Item Type: Article
Divisions: Faculty of Economics and Management
DOI Number: https://doi.org/10.1016/j.jcae.2010.09.003
Publisher: Elsevier
Keywords: Banks; Economic freedom; Profitability; Panel regression analysis; Malaysia
Depositing User: Nabilah Mustapa
Date Deposited: 04 Sep 2018 08:11
Last Modified: 04 Sep 2018 08:11
Altmetrics: http://www.altmetric.com/details.php?domain=psasir.upm.edu.my&doi=10.1016/j.jcae.2010.09.003
URI: http://psasir.upm.edu.my/id/eprint/14127
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