Unsystematic Risk Factors and Mortgage Non- Performing Loans in Kenya: Evidence from Commercial Banks

2020 ◽  
pp. 22-31
Author(s):  
Loice Koskei
Keyword(s):  
Risk Factors ◽  
Regression Model ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Secondary Data ◽  
National Bureau ◽  
Mortgage Loans ◽  
Fixed Effects Panel Regression ◽  
Fixed Effects Regression ◽  
Mortgage Defaults

Commercial banks face severe challenges relating to their processes due to variations in the financial system. Identifying methods for reducing mortgage defaults and reducing the level of nonperforming loans is very important. Mortgage defaults occur because of complex factors. The amounts of mortgage non-performing loans depend on unsystematic risk factors which have an effect on mortgage loans of commercial banks. The stronger the effect of such factors, the less useful is diversification across a large number of borrowers and the stronger are the fluctuations in portfolio losses over time. The study looked at unsystematic factors and mortgage non-performing loans in Kenya’s commercial banks. Annual panel secondary data spanning from 2014 to 2019 was obtained from the Central bank of Kenya, Banking Supervision report and Kenya National Bureau of Statistics. The six year period was chosen because of availability of Mortgage secondary data. A panel fixed effects regression model was employed to address the objective of this study. The fixed effects panel regression model results indicated that capital asset ratio and lending rate had negative and statistically insignificant effect on Mortgage non-performing. Loans to deposit ratio and bank size results indicated a positive and statistically significant effect on mortgage non-performing loans implying that loans to deposit ratio and bank size affects mortgage non-performing loans in Kenya’s commercial banks. ROA results indicated a negative but statistically significant effect on mortgage non-performing loans. The study recommended enactment of internal policies by banks in regard to unsystematic factors in order to minimize the surge in mortgage non-performing loans especially in Kenya.

Board demographic diversity, firm performance and strategic change

2014 ◽  
Vol 37 (12) ◽  
pp. 1110-1136 ◽  
Author(s):  
Daniel Kipkirong Tarus ◽  
Federico Aime
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Strategic Change ◽  
Secondary Data ◽  
Developed Countries ◽  
Outcome Variable ◽  
Demographic Diversity ◽  
Content Type ◽  
Fixed Effects Regression ◽  
High Level

Purpose – The purpose of this study is to examine the effect of boards’ demographic diversity on firms’ strategic change and the interaction effect of firm performance. Design/methodology/approach – This paper used secondary data derived from publicly listed firms in Kenya during 2002-2010 and analyzed the data using fixed effects regression model to test the effect of board demographic and strategic change, while moderated regression analysis was used to test the moderating effect of firm performance. Findings – The results partially supported board demographic diversity–strategic change hypothesis. In particular, results indicate that age diversity produces less strategic change, while functional diversity is associated with greater levels of strategic change. The moderated regression results do not support our general logic that high firm performance enhances board demographic diversity–strategic change relationship. In effect, the results reveal that at high level of firm performance, board demographic diversity produces less strategic change. Originality/value – Despite few studies that have examined board demographic diversity and firm performance, this paper introduces strategic change as an outcome variable. This paper also explores the moderating role of firm performance in board demographic diversity–strategic change relationship, and finally, the study uses Kenyan dataset which in itself is unique because most governance and strategy research uses data from developed countries.

South Africa’s increasing climate variability and its effect on food production

2021 ◽  
pp. 003072702110049
Author(s):  
Mashudu Tshikovhi ◽  
Roscoe Bertrum van Wyk
Keyword(s):  
South Africa ◽  
Climate Variability ◽  
Food Production ◽  
Fixed Effects ◽  
Crop Yields ◽  
Negative Impact ◽  
Secondary Data ◽  
Mean Annual Temperature ◽  
Fixed Effects Panel Regression ◽  
The Impact

This study examines the impact of increasing climate variability on food production in South Africa, focusing on maize and wheat yields. A two-way fixed effects panel regression model was used to assess the climate variability impacts, analysing secondary data for the period 2000 to 2019 for nine provinces in South Africa. The study found that increasing climate variability has a negative impact on maize and wheat production in South Africa. Specifically, the results indicated a negative correlation between mean annual temperature with both maize and wheat yields. A decrease in precipitation affected maize yields negatively, while the impact on wheat yields was positive, although insignificant. This analysis, therefore, depicted that crop yields generally increase with more annual precipitation and decrease with higher temperatures. The study recommends that funding initiatives to educate farmers on increasing climate variability and its effects on farming activities in South Africa should be prioritised.

scholarly journals Bank-specific, Industry-specific and Macroeconomic Determinants of Banks Profitability: Empirical Evidence from Tanzania

2016 ◽  
Vol 3 (2) ◽  
pp. 100 ◽  
Author(s):  
Saganga Mussa Kapaya ◽  
Gwahula Raphael
Keyword(s):  
Regression Model ◽  
Fixed Effects ◽  
Capital Adequacy ◽  
Market Development ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Financial Market Development ◽  
Fixed Effects Regression ◽  
Macroeconomic Determinants ◽  
Loan Losses

The study analyzed effects of bank-specific, industry-specific and macroeconomic determinants on banks profitability. It used a maximum of 350 firm-years, from 52 banks from 1998 to 2010 in Tanzania. It did proxy profitability using return on asset (ROA), return on equity (ROE) and net interest margin (NIM). The static fixed effects regression model indicated that; credit facilities (CFA), capital adequacy (TEA), credit risk (CFR), diversification ratio (DIV), bank risk (BAR) and financial market development (MCAd) were significantly influencing ROA. The dynamic fixed effects regression model indicated that lagged ROA, TEA, loan losses provisions (PLT) and BAR, were significantly influencing ROA.

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.

Ridership Ramp-Up? Initial Ridership Variation on New Rail Transit Projects

2019 ◽  
Vol 2673 (10) ◽  
pp. 82-91 ◽  
Author(s):  
Jill Elizabeth Shinn ◽  
Carole Turley Voulgaris
Keyword(s):  
United States ◽  
Performance Evaluation ◽  
Regression Model ◽  
Empirical Analysis ◽  
Fixed Effects ◽  
The United States ◽  
Rail Transit ◽  
Short Term ◽  
And Performance ◽  
Fixed Effects Regression

Conventional wisdom within the transit industry suggests that measuring the performance of a transit project immediately after project opening may not capture all the project’s benefits, since it takes time for a project to realize its short-term ridership potential, a process commonly referred to as ridership ramp-up. Though this idea is both intuitive and appealing, especially for projects that seem to be underperforming in their initial years, there is a need for empirical analysis to determine the typical magnitude and extent of ridership ramp-up to better account for ramp-up in ridership forecasting and transit project evaluation. The purpose of this study was to meet this need by evaluating variations in ridership in the initial years after project opening for 55 rail transit projects in the United States. We applied a fixed-effects regression model to predict 1-year increases in ridership in each of the first 5 years after project opening, controlling for variation in gas prices, population, income, and unemployment. We found highly variable and statistically significant increases in ridership in the first 2 years after project opening that may be attributable to ridership ramp-up. These findings could support decisions about how to account for ridership ramp-up in forecasting and performance evaluation for rail transit projects.

scholarly journals Board Size, Board Composition and Performance: An Investigation on Turkish Banks

2016 ◽  
Vol 9 (2) ◽  
pp. 74 ◽  
Author(s):  
Ozcan ISIK ◽  
Ali Riza INCE
Keyword(s):  
Financial Performance ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Board Composition ◽  
Outside Directors ◽  
Return On Assets ◽  
Board Size ◽  
Net Interest Margin ◽  
Fixed Effects Regression ◽  
The Impact

<p>We investigate the impact of board size and board composition on performance for a sample of 30 commercial banks from 2008 to 2012 in Turkey. We measure bank performance by two alternative measures widely used in the banking literature, i.e. operating return on assets (OROA) and return on assets (ROA). Controlling for bank size, credit risk, liquidity risk, net interest margin and non-interest income, the results of panel fixed effects regression suggest that board size has a significantly positive effect on bank’s financial performance. This means that Turkish commercial banks may improve their financial performance by increasing their board size. Our findings, however, show clearly that there is no significant relationship between board composition (ratio of outside directors on the board) and banks’ financial performance.</p>

scholarly journals The Effect of Capital Adequacy on Returns of Assets of Commercial Banks in Kosovo

2019 ◽  
Vol 8 (2) ◽  
pp. 201
Author(s):  
Halit Shabani ◽  
Fisnik Morina ◽  
Valdrin Misiri
Keyword(s):  
Commercial Banks ◽  
Fixed Effects ◽  
Banking Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Financial Institution ◽  
Banking System ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Capital Adequacy Ratio

The purpose of this study is to analyze the effects of capital adequacy on the return of assets to the banking sector in Kosovo. The capital adequacy ratio measures the ability of a financial institution to meet its liabilities by comparing its capital with its assets. As the banking system is one of the strongest points of our country's economy, it is understood that the capital adequacy ratio is used by banks to determine the adequacy of their capital holdings while taking their risk exposures into account.This study will provide empirical evidence of the relationship between capital adequacy and return on commercial bank assets in Kosovo during 2008-2017. It will be using secondary data obtained from audited reports of domestic banks and reports from the Central Bank of Kosovo. To measure the empirical results during this research, these econometric methods have been used: the linear regression model, the model of the fixed effects, and the random model and the GMM model. Based on the results we can conclude that capital adequacy has a positive impact on asset returns and has a significant relationship. In addition, other factors have had a positive and negative impact on the return of commercial banks' assets in Kosovo. Keywords: capital adequacy, return on assets, loans, deposits, interest rates.JEL Classification: G21, G31, G32

The Impact of the European Grapevine Moth on Grape Production: Implications for Eradication Programs

2020 ◽  
Vol 15 (4) ◽  
pp. 394-402
Author(s):  
German Puga ◽  
Wendy Umberger ◽  
Alejandro Gennari
Keyword(s):  
Regression Model ◽  
Fixed Effects ◽  
New World ◽  
European Grapevine Moth ◽  
Grapevine Moth ◽  
Fixed Effects Regression ◽  
The Impact ◽  
Jel Classifications

AbstractThe European grapevine moth is one of the most pertinent viticulture pests. In recent years, the moth extended to New World countries, some of which started eradication programs. We used a dataset for Mendoza and a county-fixed effects regression model to estimate the impact of the moth on grape production across the province's counties. Our results suggest that the moth led to a decrease of up to 8% of Mendoza's grape production; however, this may have been worse without strong eradication efforts. We conclude that moth eradication programs may be economically justified in Argentina, and perhaps in other countries. (JEL Classifications: Q10, Q18, C23)

Sign in / Sign up

Export Citation Format

Share Document