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Original scientific paper
https://doi.org/10.1515/crebss-2017-0004

Testing out the disciplinary role of debt in Croatian banks

Mario Bambulović   ORCID icon orcid.org/0000-0001-9438-222X ; Croatian National Bank, Zagreb, Croatia
Ivan Huljak
Antonija Kožul ; McKinsey & Company, Zagreb, Croatia

Fulltext: english, pdf (576 KB) pages 45-62 downloads: 184* cite
APA 6th Edition
Bambulović, M., Huljak, I. & Kožul, A. (2017). Testing out the disciplinary role of debt in Croatian banks. Croatian Review of Economic, Business and Social Statistics, 3 (1), 45-62. https://doi.org/10.1515/crebss-2017-0004
MLA 8th Edition
Bambulović, Mario, et al. "Testing out the disciplinary role of debt in Croatian banks." Croatian Review of Economic, Business and Social Statistics, vol. 3, no. 1, 2017, pp. 45-62. https://doi.org/10.1515/crebss-2017-0004. Accessed 15 Dec. 2019.
Chicago 17th Edition
Bambulović, Mario, Ivan Huljak and Antonija Kožul. "Testing out the disciplinary role of debt in Croatian banks." Croatian Review of Economic, Business and Social Statistics 3, no. 1 (2017): 45-62. https://doi.org/10.1515/crebss-2017-0004
Harvard
Bambulović, M., Huljak, I., and Kožul, A. (2017). 'Testing out the disciplinary role of debt in Croatian banks', Croatian Review of Economic, Business and Social Statistics, 3(1), pp. 45-62. https://doi.org/10.1515/crebss-2017-0004
Vancouver
Bambulović M, Huljak I, Kožul A. Testing out the disciplinary role of debt in Croatian banks. Croatian Review of Economic, Business and Social Statistics [Internet]. 2017 [cited 2019 December 15];3(1):45-62. https://doi.org/10.1515/crebss-2017-0004
IEEE
M. Bambulović, I. Huljak and A. Kožul, "Testing out the disciplinary role of debt in Croatian banks", Croatian Review of Economic, Business and Social Statistics, vol.3, no. 1, pp. 45-62, 2017. [Online]. https://doi.org/10.1515/crebss-2017-0004

Abstracts
According to the agency theory, debt brings discipline to management and therefore, one way of reducing agency costs is by increasing the level of indebtedness. Even though there are a number of specificities of banks as corporations, this agency theory postulate should still be valid. This research is motivated by the need to understand microeconomics of banking better, which could be especially rewarding in CEE countries where the issues of credit risk, bank capital and corporate governance are specific. Accordingly, by testing the disciplinary role of debt in Croatian banks, we contribute to the still scarce literature on bank governance in Croatia. We operationalise the research by first generating an efficiency measure, which we believe adequately represents management efforts and ability to maximize the value of owners’ investment. In the next step, we explore the relation between banks' efficiency and leverage. Our results do not indicate that debt generally creates a discipline mechanism for bank managers in Croatia.

Keywords
Agency theory; banking sector; Croatia; managerial efficiency

Hrčak ID: 183711

URI
https://hrcak.srce.hr/183711

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