scholarly journals Factors may drive the commercial banks lending: evidence from Jordan

2017 ◽  
Vol 12 (2) ◽  
pp. 31-38 ◽  
Author(s):  
Ayman Mansour Khalaf Alkhazaleh
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Negative Impact ◽  
Bank Lending ◽  
Time Frame ◽  
Least Square ◽  
Financial Reports ◽  
Ordinary Least Square ◽  
Statistical Effect ◽  
The Impact

In an attempt to shed more light on the behavior of lending in banks, especially in the environment of developing countries, this study aims at explaining the impact of some factors proposed as determinants of bank lending in Jordanian commercial banks by benefiting from the financial reports of thirteen banks during the period 2010-2016. The study, in order to achieve the objectives and to test the main hypotheses has adopted Ordinary least square model (OLS). The most important results of the study are a statistically significant adverse effect of both credit risk and liquidity on bank lending, while there is a significant positive effect of the return on assets, size of the bank measured by assets, inflation, money supply and growth in gross domestic product in determining the level of lending. In addition, the study does not show a significant statistical effect between investments, the volume of deposits and bank lending in the same time frame. The review points out that because of the negative impact of liquidity and credit risk factors, commercial banks need to focus more on reducing their impact because presence of this impact at the end will decrease the ability of these banks to provide loans and stay in the banking market.

scholarly journals Lending and Cash Required Reserve: Empirical Evidence from Ethiopian Commercial Bank

2018 ◽  
Vol 14 (13) ◽  
pp. 179 ◽  
Author(s):  
Mitku Malede Yimer
Keyword(s):  
Commercial Bank ◽  
Commercial Banks ◽  
Predictor Variable ◽  
Bank Lending ◽  
Least Square ◽  
Financial Data ◽  
Ordinary Least Square ◽  
Credit Creation ◽  
The Impact ◽  
The Relationship

The study was mainly intended to determine the effect of cash required reserve on commercial bank lending in Ethiopia using panel data of eight purposively chosen commercial banks over the period of eleven years (2005 to 2015). The investigation tested the relationship between commercial bank lending and cash required reserve. Eleven years financial data of eight purposively chosen commercial banks were used for analysis purpose. Ordinary least square model was applied to test the impact of predictor variable on commercial bank lending. The result suggests that, there is no significant relationship between commercial bank lending and cash required reserve in Ethiopian commercial. This study suggests that commercial bank have to give less emphasis to cash required reserve because it doesn’t weakens banks credit creation ability and does not leads a bank to be insolvent.

scholarly journals An Empirical Investigation of Islamic Calendar Effect in Global Islamic Equity Indices

2017 ◽  
Vol 9 (6) ◽  
pp. 57 ◽  
Author(s):  
Nida Shah ◽  
Muhammad Nadeem Qureshi ◽  
Yasra Aslam
Keyword(s):  
Stock Returns ◽  
Empirical Investigation ◽  
Negative Impact ◽  
Least Square ◽  
Ordinary Least Square ◽  
Regression Methods ◽  
Significant Negative Impact ◽  
Equity Indices ◽  
The Impact ◽  
Global Stock

This study aims to explore the effect of Islamic Months specifically Ramadan and Zil-Haj on the stock returns and volatility of the Islamic Global Equity Indices. For the said purpose, the data on three Global Equity Islamic Indices including; Dow Jones Islamic Market World Index, MSCI ACWI Islamic Index, and S&P Global BMI Shariah Index are collected from 5th Jan 2011 (1st Muharram 1432 A.H.) to 12th November 2015 (30th Muharram 1437 A.H.). Ordinary Least Square (OLS) and GARCH (1,1) regression methods are applied to analyze the impact of the Islamic months on global stock returns and volatility respectively. Empirical results reveal significant negative impact of Zil-Haj on returns and volatility of Islamic Global Equity Indices. However, no significant impact of Ramadan on returns and volatility of Islamic Global Equity Indices are revealed. These findings will be fascinating and of utmost interest amidst the researchers, investors and practitioners.

scholarly journals Impact of Trade Openness and Human Capital on Economic Growth: A Comparative Investigation of Asian Countries

2020 ◽  
Vol 12 (7) ◽  
pp. 2930 ◽  
Author(s):  
Rabail Amna Intisar ◽  
Muhammad Rizwan Yaseen ◽  
Rakhshanda Kousar ◽  
Muhammad Usman ◽  
Muhammad Sohail Amjad Makhdum
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Negative Impact ◽  
Trade Openness ◽  
Least Square ◽  
Ordinary Least Square ◽  
Southern Asia ◽  
Long Run ◽  
Western Asia ◽  
The Impact

The aim of this study is to analyze the impact of trade openness and human capital on economic growth in 19 Asian countries from 1985 to 2017. We selected two geographically distributed regions (Western and Southern Asia) based on difference in their GDP per capita. We applied the unit root tests to examine the level of stationarity and found that all variables were integrated at first difference. Kao and Fisher cointegration tests were employed and the results revealed the presence of a long-run relationship. We applied fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) models to check the magnitude of the long-run coefficients among trade openness, human capital and economic growth. To investigate the direction of causality, we used a Dumitrescu and Hurlin (DH) causality test. The results indicated that trade openness and human capital have a significant and positive relationship while labor force participation has a negative effect on economic growth in Southern Asia, and in the case of Western Asia, the impact is positive. Foreign direct investment (FDI) has a negative and significant impact on GDP per capita (GDPPC) in Western Asia while it is positive and significant in Southern Asia; Total population (TPOP) has a negative impact on GDPPC in both regions. Furthermore, human capital has a positive and significant impact on trade openness in both panels. Meanwhile, labor force participation (LFP) has a positive and significant impact on trade openness in Southern Asia and a negative impact in the case of Western Asia. Trade openness and economic growth have bidirectional causality in Western Asia and unidirectional causality in Southern Asia. It also shows that human capital and economic growth have unidirectional causality in both regions.

scholarly journals Getting CFO on board – its impact on firm performance and earnings quality

2020 ◽  
Vol 33 (2) ◽  
pp. 435-454
Author(s):  
Lien Duong ◽  
John Evans ◽  
Thu Phuong Truong
Keyword(s):  
Firm Performance ◽  
Negative Impact ◽  
Earnings Quality ◽  
Least Square ◽  
Chief Financial Officers ◽  
Outside Directors ◽  
Content Type ◽  
Ordinary Least Square ◽  
Board Membership ◽  
The Impact

Purpose This paper aims to investigate the impact of Australian Chief Financial Officers (CFOs) as board insiders on firm performance and earnings quality with reference to agency theory and theory of friendly board. Design/methodology/approach The ordinary least square, two-stage least-squares and propensity score matching regressions are performed with various proxies for firm performance and accruals quality. Findings Firms with CFOs as board insiders experience significantly lower firm performance and earnings quality. In firms with powerful CEOs, the negative impact of CFO board membership on earnings quality is further magnified. Additionally, the negative impact of CFO board membership on firm values and earnings quality is only present in firms with bigger boards or firms with less outside directors. The findings are consistent with the agency perspective and in sharp contrast to the US market. Originality/value This is the first Australian study to examine the impact of CFO board membership on firm performance and earnings quality. The findings suggest that the monitoring of executives is best done by a small or independent board and that the insider board membership should be optimised.

scholarly journals The Impact of Female Executives’ Proportion on Corporate Performance – Evidence from China’s Garment Industry

2018 ◽  
Vol 14 (7) ◽  
pp. 55 ◽  
Author(s):  
Junchi Shi ◽  
Maoguo Wu
Keyword(s):  
Corporate Performance ◽  
Negative Impact ◽  
Garment Industry ◽  
Least Square ◽  
Fe Model ◽  
Female Executives ◽  
Ordinary Least Square ◽  
Current Asset ◽  
Asset Turnover ◽  
The Impact

With the global appeal on gender equality, female executives’ proportion in corporations has become higher and higher. As an industry closely related to the female, is the corporate performance of the garment industry influenced by female executives’ proportion? This paper attempts to answer this question by empirical testing the impact of female executives’ proportion on the corporate performance of China’s garment industry. It investigates 20 listed Chinese garment firms from 2007 to 2015. Female executives’ proportion, along with company size, current asset turnover ratio, asset-liability ratio, number of employees, staff costs, ratio of inventory to current assets, ratio of accounts receivable to current assets, number of board meetings, and net profit growth rate, is tested to analyze the relation between female executives’ proportion and corporate performance. Fixed effect (FE) model, pooled ordinary least square (pooled OLS) model, and panel corrected standard errors (PCSE) model are utilized for robustness check. Empirical results find that female executives’ proportion has a negative impact on the corporate performance of China’s garment industry. Although the female has more of connection with the garment industry, higher female executives’ proportion does not necessarily bring better corporate performance.

The Impact of Credit Risk on Performance: A Case of South African Commercial Banks

2020 ◽  
pp. 097215092096992
Author(s):  
Babatunde Lawrence ◽  
Mishelle Doorasamy ◽  
Prince Sarpong
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Gender Diversity ◽  
Capital Adequacy ◽  
Financial Reports ◽  
Return On Equity ◽  
Leverage Ratio ◽  
Small Banks ◽  
Board Gender Diversity ◽  
The Impact

The objective of the study was to comparatively assess the impact of credit risk on the performance of big and small banks in South Africa. Data from audited financial reports of 14 commercial banks were obtained and divided into two panel data sets and analysed using the R-Studio software version 3.5.1 to assess the impact of capital adequacy ratio (CAR), non-performing loan to gross loan (NPLGL), loan-to-deposit ratio (LTDR), leverage ratio (LR), board gender diversity (BGD), with bank size (total asset) and AGE as control variables, on performance, (return on asset [ROA] and return on equity [ROE]). The findings of the study revealed that non-performing loan (NPL), CAR, LR, LTDR and age of banks all have significant and greater impact on performance, as measured by ROA, of small banks when compared with big banks. Surprisingly, NPL was revealed to have a lesser impact on the ROE of small banks as compared to the ROE of big banks but showed no impact on the ROA of big banks during the period of 2008–2017.

Political connections and audit report lag: Indonesian evidence

2018 ◽  
Vol 26 (1) ◽  
pp. 59-80 ◽  
Author(s):  
Ahsan Habib ◽  
Abdul Haris Muhammadi
Keyword(s):  
Large Body ◽  
Least Square ◽  
Political Connections ◽  
Audit Report ◽  
Financial Reports ◽  
Content Type ◽  
Related Party Transactions ◽  
Ordinary Least Square ◽  
Ordinary Least Square Regression ◽  
The Impact

Purpose This paper aims to investigate the association between political connections and the audit report lag and whether related party transactions moderate the association between the two. Design/methodology/approach An ordinary least square regression is estimated whereby audit report lag is regressed on political connections, related party transactions and the interaction between the two. Data on the number and amounts of RPTs are hand-collected from audited financial reports. A firm-year observation is politically connected if at least one large shareholder (controlling at least 10 per cent of the votes directly or indirectly) or board member or commissioner is a current or former Member of Parliament, a minister or head of local government or closely related to a politician or party. Findings Findings show that the audit report lag is relatively short for politically connected firms but increases when such firms conduct both operating and loan-type related party transactions. This suggests that auditors understand the incentives for, and the implications of, related party transactions and hence exert additional audit efforts in scrutinizing financial statements: activities that will increase the audit report lag. Originality/value Although a large body of empirical research exists on the determinants of audit report lag, none has examined the impact of political connections. This paper further contributes to the auditing literature by documenting auditors’ evaluation of related party transactions in a developing country.

scholarly journals Credit Risk and Banks’ Profitability in Malaysia

2018 ◽  
Vol 1 (1) ◽  
Author(s):  
Bakri Abdul Karim ◽  
Norlina Kadri ◽  
Kelvin Lee Yong Min
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Least Square ◽  
Loan Loss ◽  
Ordinary Least Square ◽  
Loan Loss Provision ◽  
Negative Effect ◽  
Empirical Tests ◽  
The Relationship ◽  
Positive Effect

This paper examines the relationship between credit risk and profitability of Malaysian local commercial banks which consist of eight banks they are Maybank, CIMB Bank, Hong Leong Bank, Public Bank, RHB Bank, AmBank, Alliance Bank, and Affin Bank. For the purpose of analysis this study covers a period of eight years from 2005 to 2012. The empirical tests employed in this study are Pooled Ordinary Least Square (OLS) and Panel regression. Based on the findings of this study its shows that the non-performing loan to total loan ratio (NPL/LA) and the ratio of loan loss provision to total loan (LLP/LA) have a negative effect on profitability meanwhile the total loan to total deposit ratio (LA/TD) found to have a positive effect on the return on asset (ROA). Overall the results of this study concluded that to some degree, Malaysia’s commercial banks have a very good credit risk policy.

scholarly journals The impact of the Ease Doing Business Indicators on Foreign Direct Investment in the European transition economies

Ekonomika ◽  
2020 ◽  
Vol 98 (2) ◽  
pp. 19-32
Author(s):  
Bersan Haliti ◽  
Safet Merovci ◽  
Sanjib SHERPA ◽  
Alban Hetemi
Keyword(s):  
Transition Economies ◽  
Negative Impact ◽  
Transition Countries ◽  
Least Square ◽  
Dynamic Panel ◽  
Ordinary Least Square ◽  
Doing Business ◽  
Ease Of Doing Business ◽  
Generalised Method Of Moments ◽  
The Impact

The objective (aim) of this paper is to explore the impact of the Ease of Doing Business Indicators on FDI on transition economies in Europe. Authors have used the dynamic panel methodology, by using three methods: Pooled Ordinary Least Square (POLS), Fixed Effect (FE), and Two Step-System Generalised Method of Moments (GMM) estimation techniques. By referring to the GMM technique, it can be seen that variables such as: Starting a Business, Registering property, Getting electricity and Resolving insolvency have a positive and significant impact in attracting FDI in 16 European transition countries, while variables as: Dealing with construction permits, Getting credit, Paying taxes, Protecting minority investors, have shown negative impact, whereas Trading Across Border and Enforcing contracts have not shown any impact on attracting FDIs in European transition countries. This paper contributes to the enrichment of existing literature in this field by using these three methods.

scholarly journals Impacts of Financial Inclusion on Non-Performing Loans of Commercial Banks: Evidence from China

2018 ◽  
Vol 10 (9) ◽  
pp. 3084 ◽  
Author(s):  
Feng-Wen Chen ◽  
Yuan Feng ◽  
Wei Wang
Keyword(s):  
Financial Crisis ◽  
Credit Risk ◽  
Commercial Banks ◽  
Local Governments ◽  
Banking Sector ◽  
Negative Impact ◽  
Financial Inclusion ◽  
Financial Industry ◽  
Asset Quality ◽  
The Impact

Non-performing loans of commercial banks have long hampered the development of the banking sector, and directly reflect the credit risk and asset quality. With the continuous development of the financial industry, the introduction of financial inclusion has greatly eased the shortage of funds, and narrowed the gap between poor and rich. However, whether the promotion of financial inclusion in the financial industry could affect the non-performing loans of commercial banks has not been verified. Therefore, this paper discusses the possible associations between financial inclusion and non-performing loans of commercial banks on the regional level, constructs a panel data model by selecting the data of 31 provinces (including 4 municipalities) in China from 2005 to 2016, and uses the fixed effect model for empirical test. The empirical results (from an overall national sample) reveal a negative impact of the financial inclusion on non-performing loans. Moreover, the development of the banking sector and the regional consumption could enhance the impact of financial inclusion, while government intervention and unemployment could reduce the impact of financial inclusion. From the analysis of the regional sample, when the development of financial inclusion reaches a high level, the lagged financial inclusion promote the non-performing loans of commercial banks; however, when the financial inclusion is underdeveloped, the development of commercial banks act as a disincentive to non-performing loans. Therefore, the local governments should pay more attention to the influences of financial inclusion on the financial industry, in order to maintain the stability of banking asset quality. In addition, the negative impact of financial inclusion on non-performing loans of commercial banks is significant in China central region, while its impacts in China eastern and western regions are not significant. This indicates that the development of the financial industry and economy can hamper the effects of financial inclusion. It is necessary to adjust the financial resource allocation according to the characteristics of different regions in China, so that the financial inclusion can effectively promote the regional financial industry upgrade, improve regional capital flow efficiency, and fundamentally reduce the non-performing loans of commercial banks. According to the sample analysis by time, there is a significant negative impact relationship between inclusive finance and commercial banks’ non-performing loans after the financial crisis, while the impacts before and during the financial crisis are not significant. This demonstrates that the impact of the global financial crisis on China’s regional economy has further enhanced the inefficiency of the inclusive financial system on credit risk, which in turn, helps commercial banks better maintain asset quality stability.

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