Does Liquidity Matter on Bank Profitability? Evidence from a Nonlinear Framework for a Large Sample
Journal: Business and Economics Research Journal (BERJ) (Vol.10, No. 1)Publication Date: 2019-01-30
Authors : Helmi Hamdi Abdelaziz Hakimi;
Page : 13-26
Keywords : Liquidity; Bank Profitability; PSTR Model;
Abstract
The aim of this paper is to define the optimal level of liquidity and to investigate its impact on the overall bank profitability. To achieve these goals, we use a large sample of 127 countries over the period 2005-2015. The whole sample is divided in two sub-samples. The first covers 46 high income countries and the second includes 81 low and middle income countries. We performed the Panel Smooth Transition Regression (PSTR) as econometric approach. Empirical results show that the optimal level of liquidity that affects bank profitability is 24.18% for high income countries and 40.45% for low and middle income countries. Findings also indicate that credit risk decreases significantly the level of profitability of the two groups of countries.
Other Latest Articles
- Determinants of Innovation Activity of Small and Medium-Sized Enterprises in Small Post-Soviet Countries
- THE FINANCING OF EDUCATION IN UKRAINE
- DEVELOPMENT OF THE BUDGETARY EXPENDITURES PLANNING SYSTEM IN UKRAINE
- THEORETICAL SITUATION OF RISKS, INFLUENCE OF THREATS IN THE CONTEXT OF PROVISION OF ECONOMIC SAFETY OF THE ENTERPRISE
- IVAN FRANKO ABOUT THE EMIGRATION OF UKRAINIANS: HISTORICAL AND ECONOMIC ANALYSIS IN THE CONTEXT OF MODERNITY
Last modified: 2019-03-28 05:34:52