Bank privatization and performance

Thorsten Beck

"Beck, Cull, and Jerome assess the effect of privatization on performance in a panel of Nigerian banks for the period 1990--2001. They find evidence of performance improvement in nine banks that were privatized, which is remarkable given the inhospitable environment for true financial intermediation. Their results also suggest negative effects of the continuing minority government ownership on the performance of many Nigerian banks. The authors' results complement aggregate indications of decreasing financial intermediation over the 1990s. Banks that focused on investment in government bonds and non-lending activities enjoyed a relatively higher performance. This paper--a product of the Finance Team, Development Research Group--is part of a larger effort in the group to study the effects of bank privatization in developing countries"--World Bank web site.