scholarly journals Factors Affecting the Competitive Capacity of Commercial Banks: A Critical Analysis in an Emerging Economy

2020 ◽  
Author(s):  
Kieu Oanh Dao ◽  
Le Kieu ◽  
Pham Thuy Tu ◽  
V.C. Nguyen
Keyword(s):  
Market Power ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Banking System ◽  
Least Square ◽  
Fixed Effects Model ◽  
Factors Affecting ◽  
The Impact

This research was conducted to investigate the factors influencing the commercial bank’s competitive capacity in an emerging country. Data were collected from the domestic-owned commercial banks and foreign-owned commercial banks listed on Vietnam’s Stock Exchange over the period of nine years from 2010 to 2018. Three statistic approaches were employed to address econometrics issues and to improve the accuracy of the regression coefficients: Pooled Ordinary Least Square (Pooled OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). To correct the diagnostics and endogeneity in the model, the study uses Generalized Least Square (GLS) and Generalized Method of Moments (GMM). In order to account for the degree of competitive capacity we use Lerner index. Results demonstrate that the impact of bank-specific characteristics on market power in banks is statistically significant, and there are substantial distinguishments of economic consideration among these factors. In addition, a bank with a higher level of competitive capacity in the previous year will outstandingly generate competitive capacity in the current year. Another possibility, a greater level foreign investment into the banks in the host country could further encourage competitive capacity in the banking system. Finally, economic growth rate has no impact on competitive capacity at a significant level of 5% while a positive effect from inflation on bank’s market power could be found.

scholarly journals Factors Affecting the Competitive Capacity of Commercial Banks: A Critical Analysis in an Emerging Economy

2020 ◽  
Vol 11 (4) ◽  
pp. 241 ◽  
Author(s):  
Le Kieu Oanh Dao ◽  
Thuy Tu Pham ◽  
Van Chien Nguyen
Keyword(s):  
Market Power ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Banking System ◽  
Least Square ◽  
Fixed Effects Model ◽  
Factors Affecting ◽  
The Impact

This research was conducted to investigate the factors influencing the commercial bank’s competitive capacity in an emerging country. Data were collected from the domestic-owned commercial banks and foreign-owned commercial banks listed on Vietnam’s Stock Exchange over the period of nine years from 2010 to 2018. Three statistic approaches were employed to address econometrics issues and to improve the accuracy of the regression coefficients: Pooled Ordinary Least Square (Pooled OLS), Random Effects Model (REM), and Fixed Effects Model (FEM). To correct the diagnostics and endogeneity in the model, the study uses Generalized Least Square (GLS) and Generalized Method of Moments (GMM). In order to account for the degree of competitive capacity we use Lerner index. Results demonstrate that the impact of bank-specific characteristics on market power in banks is statistically significant, and there are substantial distinguishments of economic consideration among these factors. In addition, a bank with a higher level of competitive capacity in the previous year will outstandingly generate competitive capacity in the current year. Another possibility, a greater level foreign investment into the banks in the host country could further encourage competitive capacity in the banking system. Finally, economic growth rate has no impact on competitive capacity at a significant level of 5% while a positive effect from inflation on bank’s market power could be found.

Dampak Kebijakan Moneter Pada Output Di Negara-Negara ASEAN Tahun 1980-2014

2017 ◽  
Vol 4 (1) ◽  
pp. 58-70
Author(s):  
Nur Widiastuti
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Fixed Effects ◽  
Empirical Studies ◽  
Negative Relationship ◽  
Least Square ◽  
Fixed Effects Model ◽  
State Data ◽  
Ordinary Least Square ◽  
The Impact

The Impact of monetary Policy on Ouput is an ambiguous. The results of previous empirical studies indicate that the impact can be a positive or negative relationship. The purpose of this study is to investigate the impact of monetary policy on Output more detail. The variables to estimatate monetery poicy are used state and board interest rate andrate. This research is conducted by Ordinary Least Square or Instrumental Variabel, method for 5 countries ASEAN. The state data are estimated for the period of 1980 – 2014. Based on the results, it can be concluded that the impact of monetary policy on Output shown are varied.Keyword: Monetary Policy, Output, Panel Data, Fixed Effects Model

scholarly journals The Impact Of Good Corporate Governance To Manufacturing Firm’s Profitability And Firm’s Value

2016 ◽  
Vol 5 (2) ◽  
pp. 181-196 ◽  
Author(s):  
Johanes Sumarno ◽  
Sendy Widjaja ◽  
Subandriah Subandriah
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Fixed Effects Model ◽  
Good Corporate Governance ◽  
Oecd Principles ◽  
Equitable Treatment ◽  
The Impact

This paper studied the behavior of management toward the implementation of Good Corporate Governance in Indonesia to determine whether it has any influence towards profitability and its implication to the Manufacturing Firms’ value publicly listed in Indonesian Stock Exchange. There were 41 corporations who met the criteria of the survey. The data were analyzed using Panel Regression with fixed effects Model. The empirical findings show that the implementation of Corporate Governance in Indonesia has a positive, significant and direct impact toward firms’ profitability and firms’ value. Corporate Governance principles based on OECD principles that have positive and significant impact to both profitability and Firms’ Valueis Rights of Shareholders, Role of Stakeholders, Responsibilities of the Board Commissioners and Board of Directors. The principles that have significance and negative impact towards corporate profitability and value, are: Equitable treatment of shareholders and Disclosure and Transparencies. The most significant principle influencing profitability and firms’ value is Disclosure and Transparencies. Profitability plays a greater role in influencing Manufacturing Firms’ value in Indonesia. DOI: 10.15408/sjie.v5i2.3542

scholarly journals Determinants of Capital Adequacy among the Commercial Banks in Ghana

2020 ◽  
pp. 88-95
Author(s):  
Ernest Somuah Annor ◽  
Fredrick Somuah Obeng ◽  
Nelly Opoku Nti
Keyword(s):  
Commercial Banks ◽  
Fixed Effects ◽  
Banking System ◽  
Secondary Data ◽  
Least Square ◽  
Capital Adequacy ◽  
Annual Reports ◽  
Independent Variables ◽  
Strict Compliance ◽  
Asset Quality

The study examined the determinants of capital adequacy among selected commercial banks in Ghana. Eight banks were sampled for the periods 2009-2016, secondary data was gathered from the annual reports of selected banks as well as the Ghana Banking Survey authored by Price Waterhouse Coopers Ghana (PWC). A balanced panel approach was employed in investigating the determinants of capital adequacy among selected commercial banks in Ghana whilst comparing estimates of pooled OLS, random and fixed effects models and the generalized least square models to ascertain the robustness of the model. The finding suggests that all the independent variables statistically and significantly influence capital adequacy. While non-performing loans negatively relate to CAR, LFTD and ROA positively impact CAR or asset quality. It is recommended that the central bank and various banks operating in Ghana pay attention to strict compliance with the regulatory regimes to keep banks sound and fit to withstand distress and losses which may, in turn, affect the banking system and economy in entirety.

scholarly journals The impact of credit risk and macroeconomic factors on profitability: the case of the ASEAN banks

2020 ◽  
Vol 15 (1) ◽  
pp. 21-29
Author(s):  
Myra V. De Leon
Keyword(s):  
Credit Risk ◽  
Fixed Effects ◽  
Inflation Rate ◽  
Ordinary Least Squares ◽  
Gdp Growth ◽  
Fixed Effects Model ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Level Of Significance ◽  
The Impact

This study investigates the effect of credit risk and macroeconomic factors on profitability of 20 ASEAN banks, particularly from Indonesia, Malaysia, Thailand and Philippines, covering the period of 2012 to 2017. The unbalanced panel data were tested for heteroscedasticity and normality. A fixed effects model and a random effects model were utilized followed by simple ordinary least squares (OLS) regression. The obtained results show that credit risk and GDP growth negatively affect Return on Equity (ROE) at 5% level of significance. The inflation rate increases ROE by 0.323%. In terms of influence, inflation has the highest impact on ROE followed by GDP growth and credit risk. Credit risk and GDP growth negatively affect Return on Assets (ROA) at 5% level of significance. ROA was also influenced by an increase in inflation rate. Therefore, this study will help banks and bank managers, depositors, investors, policy makers and governments to identify factors affecting bank profitability.

scholarly journals Factors affecting Non-Performing Loans (NPLs) of banks: The case of Vietnam

2020 ◽  
Vol 10 (2) ◽  
Author(s):  
Vo Minh Long ◽  
Nguyen Thi Yen ◽  
Pham Dinh Long
Keyword(s):  
Commercial Banks ◽  
Fixed Effects ◽  
Inflation Rate ◽  
Research Problem ◽  
Random Effects Model ◽  
Policy Recommendations ◽  
Fixed Effects Model ◽  
Factors Affecting ◽  
Negative Impacts ◽  
Problem Data

This study aims to identify factors affecting Non-Performing Loans (NPLs) of commercial banks in Vietnam. To address the research problem, data of commercial banks in Vietnam from 2008 to 2017 were collected. This study applied a fixed-effects model in comparison with a random-effects model on a panel data of 200 observations. Results from the firmly fixed-effects model indicated that NPLs were positively affected by its lag of the previous year, capital structure, and interest rate. Additionally, returns on asset, inflation rate, and credit growth were found to have negative impacts on NPLs. However, impacts of firm size and gross domestic product were not found across the models. Based on the results, this research suggested several policy recommendations for the management of NPLs in the commercial banks.

Corporate diversification and firm value: evidence from emerging markets

2015 ◽  
Vol 10 (3) ◽  
pp. 294-310 ◽  
Author(s):  
Elif Akben Selçuk
Keyword(s):  
Emerging Markets ◽  
Firm Value ◽  
Fixed Effects ◽  
Generalized Method Of Moments ◽  
Corporate Diversification ◽  
Fixed Effects Model ◽  
Developed Country ◽  
Content Type ◽  
Diversified Firms ◽  
The Impact

Purpose – The purpose of this paper is to investigate the impact of corporate diversification on firm value in a sample of nine emerging markets including Brazil, Chile, Indonesia, Malaysia, Philippines, Poland, South Africa, Thailand, and Turkey. For the purpose of this study, a company is classified as diversified when it is operating in two or more lines of business defined by the two-digit SIC codes. Design/methodology/approach – Employing panel data from 1,568 companies for the period 2005-2010, this paper estimates both a fixed effects model and a dynamic generalized method of moments model. Data are collected both at company level and segment level within each firm. Findings – Overall, analysis results suggest that, for the period from 2005 to 2010, diversified firms in emerging markets are valued more compared to single-segment firms operating in similar industries, providing support for diversification premium. Originality/value – The effect of diversification on company value in emerging markets is an important managerial and public policy concern. Although the literature on developed country diversified firms is rich, only a few studies have examined diversification-value relationship in the context of developing countries. Furthermore, most previous research on the value effects of corporate diversification in emerging markets has taken the form of case studies within countries and concentrated on the 1990s. This paper tries to fill these gaps by using a larger sample and more recent data and methodology.

scholarly journals Low Interest Rates and Bank Risk-Taking: Has the Crisis Changed Anything? Evidence from the Eurozone

2015 ◽  
Vol 8 (1) ◽  
pp. 125-148 ◽  
Author(s):  
Alin Marius Andries ◽  
Vasile Cocriş ◽  
Ioana Pleşcău
Keyword(s):  
Monetary Policy ◽  
Interest Rates ◽  
Risk Taking ◽  
Fixed Effects ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Bank Risk ◽  
Fixed Effects Model ◽  
Loan Loss ◽  
The Impact

AbstractThis paper examines the impact of monetary policy on bank risk-taking and the influence of the recent financial crisis on this relation. We use a dataset of 571 commercial banks from Eurozone and analyze the relation on the period from 1999 to 2011, with emphasize on the period 2008 to 2011. We use non-performing loans, loan loss provisions and Z-score as measures for bank risk-taking, while for monetary policy the proxies are short-term interest rates (computed using a Taylor rule) and long-term interest rates. We determine the relation between the two by taking into account some specific control variables and analyze it using an entity fixed-effects model and Generalized Method of Moments, alternatively. Empirical results point to a negative relation between interest rates and bank risk-taking. In addition to this, results show that the crisis has led to an additional negative impact on the relation between interest rates and bank risk-taking for the turmoil period 2008-2011.

scholarly journals The Impact of Dividend Policy on the Relationship Between Institutional Ownership and Stock Price Volatility: Evidence from Pakistan

2013 ◽  
Vol 2 (1) ◽  
pp. 111-132
Author(s):  
Atif Hussain
Keyword(s):  
Stock Price ◽  
Fixed Effects ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Price Volatility ◽  
Institutional Ownership ◽  
Fixed Effects Model ◽  
Stock Price Volatility ◽  
The Impact ◽  
The Relationship

This study aims to determine the effects of dividend policy on the relationship between institutional ownership and stock price volatility, based on a sample of 36 firms listed on the Karachi Stock Exchange over a seven-year period (2005–11). We use a fixed-effects model applied to panel data to investigate this relationship and find that institutional ownership has a negative relation with stock price volatility and a positive relation with the dividend payout ratio. The results also show that dividend payouts significantly affect the relationship between institutional ownership and stock price volatility. The mediating role of dividend policy between institutional ownership and stock price volatility reveals that institutional investors prefer to invest in low-volatility dividend-paying stock.

Quiet life hypothesis reborn: is “holdinglisation” relevant?

2019 ◽  
Vol 45 (2) ◽  
pp. 278-293 ◽  
Author(s):  
Maria Christina Liem
Keyword(s):  
Market Power ◽  
Market Share ◽  
Commercial Banks ◽  
Banking Industry ◽  
Least Square ◽  
Content Type ◽  
Indonesian Government ◽  
Financial Failure ◽  
Conventional Banks ◽  
The Impact

Purpose Quiet life hypothesis (QLH) states that banks with a higher market power will generate high profitability quietly, even though it could cause inefficiency. In the long term, it could turn a high profitability into a lower future profitability. This paper identifies QLH-reborn through the holdinglisation strategy of the Indonesian Government to include all state-owned banks into one holding, hence increasing the market power of Indonesian state-owned banks within ASEAN. Optimum profitability and optimum efficiency are the objectives of the “holdinglisation” idea. Therefore, the purpose of this paper is to analyse the relevance of holdinglisation within the Indonesian banking industry. Design/methodology/approach This paper focusses on analysing the efficiency and soundness of four state-owned conventional banks and four state-owned Islamic banks in Indonesia during 2011–2015. Subsequently, this paper analyses the impact of bank effectiveness index and soundness rank on return on average asset (ROAA) and ROAE through the data panel of general least square regression using STATA. Findings This paper shows that all state-owned commercial banks in Indonesia during 2011–2015 are efficient and sound. Furthermore, this paper finds that market power (market share for deposit and market share for loans) has an insignificant impact on bank efficiency (BE) index, bank soundness rating, ROAA and EM. Meanwhile, BE index and BS rating have a significant impact on ROAA. Therefore, this paper concludes that holdinglisation regulation as QLH-reborn is irrelevant for Indonesian state-owned banks at this moment. Research limitations/implications This paper has a crucial limitation. Holdinglisation as QLH-reborn is irrelevant under the condition that all state-owned commercial banks in Indonesia are efficient and sound. Moreover, this paper contributes another actual empirical study of QLH. Practical implications This paper represents a scientific argumentation towards a holdinglisation strategy of state-owned commercial banks in Indonesia. Therefore, this paper could be a scientific reference for the Indonesian Government to improve Indonesian state-owned commercial banks competitiveness in ASEAN. Originality/value This paper is urgently needed for the Indonesian banking industry because the Indonesian Government should consider the drawbacks of holdinglisation as QLH reborn to the Indonesian banking industry, such as inefficiency and the risks of financial failure. Moreover, if the bank experiences financial failure, it could have a detrimental and lasting effect on the country’s macroeconomic condition.

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