scholarly journals Internal and external determinants of Iraqi bank profitability

2020 ◽  
Vol 15 (2) ◽  
pp. 79-93 ◽  
Author(s):  
Hamid Mohsin Jadah ◽  
Manar Hayder Ali Alghanimi ◽  
Noor Sabah Hameed Al-Dahaan ◽  
Noor Hashim Mohammed Al-Husainy
Keyword(s):  
Panel Data ◽  
Fixed Effects ◽  
Positive Impact ◽  
Negative Influence ◽  
Data Availability ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Conventional Banks ◽  
The Relationship

The determinants of bank profitability are very important, as bank profitability significantly affects the economies of countries. This study aims to examine the internal determinants (bank-specific characteristics) and external determinants (macroeconomic factors and government variables) of bank profitability in Iraq. The study uses unbalanced panel data from 18 banks in Iraq for thirteen years, from 2005 to 2017. The relationship is estimated using a fixed effects approach. The study selected 18 conventional banks considering their data availability in the period from 2005 to 2017. Based on the panel data method, the results show that bank size, the equity to total assets and total loans to total assets ratios, GDP growth, and government effectiveness have a significant and positive impact on the profitability of Iraqi banks. Meanwhile, credit risk, inflation, interest rate, unemployment, and political instability have a significant negative influence on bank profitability. To the authors’ knowledge, this study is considered one of the earliest studies of its kind, in which the main factors affecting Iraqi bank profitability are determined. That said, this paper makes a significant contribution to the theoretical literature, the industry, and policymakers, so that the performance of Iraqi conventional banks can be improved. Acknowledgments The authors acknowledge the support from Ministry of Higher Education in Iraq, University of Kerbala, AL-Furat AL-Awsat Technical University, and Imam AL-Kadhum College for Islamic Studies. Furthermore, we appreciate the support by Prof. Dr. Sivarajasingham Selliah, Assistant Prof. Dr. Muhammad Abrar Ul Haq, and Dr. Mohammed Hasan.

scholarly journals Origins of Banks and Credit Supply in Ivory Coast

2020 ◽  
Vol 12 (5) ◽  
pp. 81
Author(s):  
Prao Yao Seraphin
Keyword(s):  
Panel Data ◽  
Ivory Coast ◽  
Inflation Rate ◽  
Positive Impact ◽  
Negative Influence ◽  
The Other ◽  
Foreign Banks ◽  
Credit Supply ◽  
Other Hand ◽  
The Relationship

This paper provides an empirical assessment of the relationship between banking origins and the supply of credit in Ivory Coast. The analysis focuses on 14 banks composed of local banks, African banks and foreign banks outside Africa. The study covers the period from 2000 to 2016. Using the panel data approach, we show that local banks positively influence the supply of credit unlike foreign and African banks. Foreign banks, on the other hand, have a negative influence on the supply of credit in Ivory Coast. In addition, the results highlight the positive impact of growth and market share on the supply of credit to the private sector. On the other hand, the size of banks and the inflation rate are unfavourable to the supply of credit in Ivory Coast. The study suggests that local banks should be strengthened so that they can provide more financing to the Ivorian economy.

scholarly journals Determinants of bank profitability before, during, and after the financial crisis

2018 ◽  
Vol 14 (4) ◽  
pp. 378-398 ◽  
Author(s):  
Ismail Adelopo ◽  
Robert Lloydking ◽  
Venancio Tauringana
Keyword(s):  
Panel Data ◽  
Financial Crisis ◽  
Cost Management ◽  
West African ◽  
Bank Profitability ◽  
Macroeconomic Factors ◽  
Content Type ◽  
Panel Model ◽  
The Relationship ◽  
Specific Capital

Purpose The purpose of this paper is to report the results of an investigation into the relationship between bank-specific, macroeconomic factors and bank profitability before (1999-2006), during (2007-2009), and after (2010-2013) the financial crisis. Design/methodology/approach Using the Economic Community of West African States’ bank panel data from 1999 to 2013, the paper used fixed effect models. The panel model includes bank-specific determinants (size, cost management, and liquidity), industry level, and macroeconomic variables. Findings Panel data analyses results show that there is a significant relationship between bank-specific determinants (size, cost management, and liquidity) and bank profitability (ROA) before, during, and after the financial crisis. However, the relationships between other bank-specific (capital strength, credit risk, and market power), macroeconomic (gross domestic product and inflation) determinants are sensitive to both periods of analysis (before, during, and after financial crisis) and bank profitability measure used (ROA or NIM). Originality/value Overall, these results suggest that the financial crisis did not affect the relationships between some bank-specific determinants and bank profitability.

scholarly journals The Effect of Capital Structure on Profitability: An Empirical Panel Data Study

2019 ◽  
Vol 8 (1) ◽  
pp. 65-77 ◽  
Author(s):  
Narinder Pal Singh ◽  
Mahima Bagga
Keyword(s):  
Panel Data ◽  
Capital Structure ◽  
Fixed Effects ◽  
Regression Models ◽  
Positive Impact ◽  
Stock Exchange ◽  
Panel Data Regression ◽  
Data Regression ◽  
The Individual ◽  
The Relationship

One of the most perplexing issues faced by finance managers is to know about the effect of capital structure on the profitability of firm. Many studies have been carried out to examine the effect of capital structure on the profitability of firms, but most of them belong to other parts of the world, and only few studies have been conducted in India. Thus, the present study has been undertaken to evaluate the effect of capital structure on the profitability of Nifty 50 companies listed on National Stock Exchange of India from 2008 – 2017. The data has been analyzed by using descriptive statistics, correlation and multiple panel data regression models. Four different regression models have been used to study the relationship between capital structure and profitability. In these models, we study the individual effect of total debt and total equity ratios on profitability, that is, ROA and ROE. All four models have been tested with pooled OLS, fixed effects, and random effects. We conclude that there is significant positive impact of capital structure on firm’s profitability.

Spatial Analysis of the Relationship Between Income and Consumption of the Population Based on Panel Data

2021 ◽  
Vol 28 (2) ◽  
pp. 128-139
Author(s):  
I. A. Lakman ◽  
V. M. Timiryanova ◽  
D. V. Popov
Keyword(s):  
Panel Data ◽  
Capita Income ◽  
Fixed Effects ◽  
Negative Impact ◽  
Positive Impact ◽  
Per Capita Income ◽  
Spatial Error ◽  
Spatial Dependencies ◽  
Per Capita ◽  
The Relationship

The article presents results of a study on influence of population dynamics, regional characteristics and the type structure of income on consumption. The ability to investigate spatial dependencies and territorial effects over time was made possible by autoregression spatial models built on panel data. The article describes features of such models, sequence of calculations, and also presents modified tests to justify the choice of the model specification.Calculations were made using data from 83 constituent entities of the Russian Federation (cross-sectional observations) for 2010–2019 (10 time periods). The analysis showed that both population income and retail turnover, which largely determine the level and structure of population consumption, have spatial dependencies. The built spatial error model with fixed effects showed a positive influence on population consumption in the neighboring territories. The model also confirmed previously identified relationships: the positive impact of average per capita income and the negative impact of the Gini index on consumption. The built model with fixed effects allowed to isolate the individual effects of the territories, visualized using cartogram. On the basis of these assessments, several groups of territories with common properties and characteristics have been identified.Unlike previously built models, the authors’ spatial error autoregression model, built on panel data, took into account both the geographical heterogeneity and spatial dependence of average per capita income and retail turnover, expanding the existing understanding of the relationship between consumption and income. This, in turn, enables management decisions that take into account previously undetected features and enhance their validity.

scholarly journals How do Poverty and Income Inequality affect Economic Growth in Developing Countries?

2021 ◽  
Vol 4 (2) ◽  
pp. 547-558
Author(s):  
Hamza Saleem ◽  
Fatima Farooq ◽  
Muhammad Aurmaghan
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Income Inequality ◽  
Negative Impact ◽  
Positive Impact ◽  
Development Indicators ◽  
The Relationship ◽  
Positive Effect ◽  
World Development

The major objective of this research is to examine the relationship between poverty, income inequality and economic growth from some selected developing countries. This study uses panel data for the period of 2002-2015. All the data is taken from world development indicators (WDI). To find out the results, we have used Hausman test an econometrics technique for panel data in this research. The results of the study indicate that poverty and income inequality have a negative impact on economic growth on the other hand Gross capital formation, labor force, total population and government consumption and expenditure have a positive impact on economic growth. The result tells us that changes in these variables have a significant and positive effect on the dependent variable. To achieve the goal of economic growth developing countries should reduce poverty and take meaningful steps to overcome the problem of inequality in the society which can be very helpful in achieving the goal of economic growth.

scholarly journals Governance and Financial Difficulties of Conventional Banks

2019 ◽  
Vol 2 (2) ◽  
pp. 121-134
Author(s):  
La Ode Sumail
Keyword(s):  
Fixed Effects ◽  
Large Scale ◽  
Lagrange Multiplier Test ◽  
Fixed Effects Model ◽  
Insider Ownership ◽  
Financial Difficulties ◽  
Private Banks ◽  
Conventional Banks ◽  
Relationship Of ◽  
The Relationship

This study examines the connection between governance, financial performance, and financial difficulties of 27 conventional private banks during the pe3riod of 2015-2018. In order to meet the accuracy of the model in the regression analysis, the Lagrange Multiplier test was previously performed so that the Fixed Effects model was chosen. The relationship of insider ownership with ROA tends to be in the shape of inversed-U and the relationship between institutional ownership and ROA is significantly positive. The relationship between ROA and financial difficulties is significantly negative. Older or established large scale banks tend to have high ROA. This happens because the greater the assets, the healthier the cash flow of the bank, so that the potential for return of asset is quite high and financial difficulties tend to be low or avoidable.

Does digital proximity between countries impact entrepreneurship?

Info ◽  
2015 ◽  
Vol 17 (5) ◽  
pp. 46-65 ◽  
Author(s):  
Maria Veronica Alderete
Keyword(s):  
Panel Data ◽  
Spatial Dependence ◽  
Fixed Effects ◽  
Spatial Models ◽  
Negative Influence ◽  
Entrepreneurial Activity ◽  
Spatial Effects ◽  
Content Type ◽  
Spatial Spillovers ◽  
Information And Communication

Purpose – This paper aims to determine if there is a spatial dependence in the entrepreneurial activity among countries. The existence of a “digital proximity” could explain the spatial pattern of entrepreneurship. Design/methodology/approach – This question is empirically addressed by using a five-period, 2008-2012, panel data for 35 countries. A spatial fixed effects panel data model is estimated by using the total entrepreneurial activity published by the global entrepreneurship monitor as the dependent variable. Findings – A significant negative influence of the digital proximity on the entrepreneurial activity is observed. Mobile broadband (MB) direct effect is positive while the indirect effect (the spatial spillovers) is negative, leading to a negative total effect on the total entrepreneurial activity. This result is contrary to non-spatial models’ results. Besides, a higher MB penetration in a country would lead to a competitive advantage fostering its opportunities for entrepreneurship, but reducing those of its neighbours’. Originality/value – This paper examines the relationship between information and communication technology (ICT) and entrepreneurship, by introducing the spatial effects is the main contribution. This paper expands the scant literature on the ICT impact on entrepreneurship. Results obtained support policies towards enforcing innovation, education and reducing entry regulations for encouraging entrepreneurship. Meanwhile, MB policies could counteract the entrepreneurial policies’ results due to the spatial dependence.

The validity of the irrelevant theory in Middle East and North African markets: conventional banks versus Islamic banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Akram Ramadan Budagaga
Keyword(s):  
Middle East ◽  
Fixed Effects ◽  
Positive Impact ◽  
Islamic Banks ◽  
Dividend Yield ◽  
Mena Region ◽  
Content Type ◽  
Mena Countries ◽  
Growth Opportunity ◽  
Conventional Banks

Purpose The purpose of this paper is to test the validity of irrelevant theory empirically by exploring the relationship between cash dividends, profitability, leverage and investment policy with the value of banking institutions in the Middle East and North Africa (MENA) markets. Design/methodology/approach The paper adopts Ohlson’s (1995) valuation model. The author estimates models by using static panel (random and fixed effects) techniques and the dynamic technique, namely, the GMM estimation. The empirical study covers a sample of 122 conventional and 37 Islamic banks listed on stock markets in 12 MENA countries over the period 1999–2018. Findings The empirical results show that dividend yield has no significant association with the value of conventional banks, whereas profitability, growth opportunity and leverage have a significant positive impact on the value of conventional banks. In contrast, the results for a sample of Islamic banks indicate that the dividend yield, profitability and leverage have a significant positive effect on the value of Islamic banks, whereas growth opportunity has no significant effect on the value of Islamic banks. Therefore, these results support, to a greater extent, the validity of the dividend irrelevance theory of Modigliani and Miller for conventional banks but would not be accepted for Islamic banks in the MENA region. Research limitations/implications This study is restricted to a sample of one type of financial firms, banking firms listed in the MENA countries. In addition, the study has dealt with one type of dividend (the cash dividend). Practical implications Highlighting the difference between conventional and Islamic banks is crucial to understanding dividend policy behavior and to providing investors information to be integrated in their valuation setting to make informed corporate decisions. Originality/value To the best of the author’s knowledge, the present study is the first of its kind that it draws a comparative analysis by testing empirically the validity of the Irrelevant Theory to banks in the MENA region covering a long time period in the recent past.

scholarly journals Determinants of the Solvency of Insurance Companies in Palestine

2019 ◽  
Vol 10 (6) ◽  
pp. 188
Author(s):  
Yousef Abdel Latif Abdel Jawad ◽  
Issam Ayyash
Keyword(s):  
Quantitative Analysis ◽  
Panel Data ◽  
Fixed Effects ◽  
Financial Statements ◽  
Insurance Companies ◽  
Insignificant Effect ◽  
Analysis Methods ◽  
Negative Effect ◽  
The Relationship ◽  
Positive Effect

The study aimed to investigate the factors that affect the solvency of the insurance companies in Palestine and to highlight the nature and strength of the relationship between liquidity, investment, leverage, claims and the solvency of the insurance companies in Palestine.To achieve the objectives of the study, the descriptive and quantitative analysis methods were used in the study. Based on the data of the financial statements of seven insurance companies (out of 9 companies) and by using regression of fixed effects of panel data for 2010-2017, the study found that the claims have a positive effect on the financial solvency and leverage has a negative effect on the solvency of insurance companies in Palestine, while investment and liquidity have an insignificant effect on financial solvency.

Islamic Banking and Economic Growth

2020 ◽  
pp. 86-114
Author(s):  
Bilal Kchouri ◽  
Thorsten Lehnert
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Panel Data ◽  
Economic Performance ◽  
Fixed Effects ◽  
Banking Industry ◽  
Financial Structure ◽  
Islamic Banking ◽  
Total Size ◽  
Macroeconomic Factors

This chapter measures the effect of growth in Islamic Banking assets on economic performance in a sample of 32 developed and developing countries based on data for the period 2000-2017. The findings show that, although Islamic banks are considered small relative to the total size of the financial sector, these are positively correlated with economic growth even after controlling for financial structure, macroeconomic factors and other variables. The outcome is robust across different econometric specifications like pooling OLS, fixed effects, and panel data with over-identified GMM. The results are confirmed on two different indicators of Islamic banking and hold for different periods. Empirical findings confirm theoretical expectations that although Islamic banking still represents a relatively very small share of the financial system, it is growing and generating an economic boost to ensure a stable banking industry.

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