Dynamic Linkages Between Profitability and Its Determinants

• 발행기관: 한국유통과학회
• 저자명: Hussain A. BEKHET Ahmad Mohammad ALSMADI Mohamed KHUDARI
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.6, 687~700쪽, 전체 14쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.06.30

영문 초록

This paper employed the panel Unit root tests, co-integration, and panel Autoregressive Distributed Lag (ARDL) model to examine the link between banks’ profitability and its determinants for 13 Jordanian commercial banks between 2000 and 2018. Pooled mean group (PMG) and dynamic fixed effect (DFE) models were applied. Hausman test result confirmed that DFE was preferred to PMG. The results confirmed the existence of a long-run equilibrium relationship between commercial banks’ profitability and their determinants. In the short-run, banks’ profitability in Jordan is positively related to return volatility. However, this is negatively related to credit risk and market concentration. In the long run, profitability is positively related to credit risk and negatively related to operational risk, bank size, stock market volatility, and market concentration. Credit risk and capital have bi-direction causality with banks’ profitability, while GDP and market concentration have uni-direction causality. At present, the Jordanian economy during the Covid-19 pandemic triggered the banking sector’s impact on the economy as the sector contributed to 20.8% GDP in 2019. The findings can help stakeholders such as bank managers, investors, shareholders, and policymakers make better decisions on banks’ performance, thereby contributing to their economies.

목차

1. Introduction

2. Overview of the Jordanian Economy and Banking Sector

3. Theoretical Background and Literature Review

4. Data and Methodology

5. Results and Findings

6. Conclusion

키워드

Profitability Commercial Banks Pooled Mean Group Dynamic Fixed Effect Jordan