Exploratory Assessment of National Promotional Banks' Business Models' Resemblance

Introduction

The purpose of the research performed in this chapter is to take a closer look at the business model implemented by the national promotional banks in EU, with a focus on the period following the financial crisis. It has been investigated whether NPBs have aligned their business practices and balance sheets structure, by operating homogeneously irrespective of the country of origin, or there is evidence of heterogeneity across financial positions and financial indicators.

Cluster analysis is the best suited statistical method for the purpose of this research as it provides, through a series of algorithms, a classification of banks included in the sample into distinct groups or clusters, by relying on a pre-established set of continuous variables. The chapter has been organized as follows: the first sub-chapter describes the peculiarities of the methodology employed, the two research hypotheses and the underlying data. The second sub-chapter presents the empirical results obtained, for each research hypothesis, and discusses the findings.