Banking Efficiency and Financial Stability: Which Causes Which? A Panel Analysis

Abstract

This paper attempts to investigate the relationship between banking efficiency and financial stability using a sample of 12 MENA countries, over the period from 2005 to 2014. Using panel analysis according to fixed effect model, results indicate that hypotheses regarding the significance of this impact could be accepted. Also, robustness checks, using dynamic effect model, assure the significance of these effects.