This study aims at testing the effect of the components of the PRAT model and the basic model developed by Robert Higgins on the rate of sustainable growth by applying them to a sample of Saudi banks during the period of 2010–2019. Regarding the PRAT model, as Higgins explained, it is that detailed model measuring the sustainable growth rate by profit margin (P), retention rate (R), asset turnover (A), and leverage (T). To test the relation between the study variables, multiple regression analyses were conducted using the Pooled Model (PEM), the Fixed Effect Model (FEM), and the Random Effect Model (REM). The results showed that all the variables of the PRAT model affect sustainable growth (profitability margin, retained earnings, asset turnover, and financial leverage). Moreover, the application of the basic model of Higgins shows that the rate of return on equity and retained earnings affect sustainable growth. When drawing a comparison among statistical measurement models and checking the validity of these models, the validity of the fixed effect model for measuring the relation between the variables of the PRAT model and Higgins basic model is seen.
This study aims to test the causal relationship between Saudi stock market index (TASI) and sectoral indices throughout the period from 2016–2020. The study data were extracted through the main index of the Saudi market and the indices of the available data of 19 sectors out of 21 sectors. The unit root test was used along with the Granger causality test, in addition to multiple regression tests in order to analyze the study hypotheses. The study shows that all index series were stationary at the zero level I (0), and the results also show that there were bidirectional and unidirectional causal relationships between TASI and sectoral indices, and that TASI effectively mirrors all the changes that occur in the Saudi stock market.
Purpose: This current study investigates the impact of this new liquidity regulation on banks' profitability in Saudi Arabia. A sample of 12 Saudi banks covering the period 2015-2018 was used in the study. Design/Methodology/Approach: This study adopted several models of panel data, such as the pooled ordinary least square, the fixed effects model and the random effects model. Findings: The empirical results indicated that the new liquidity ratio had no impact on Saudi banks' profitability, as it was plausibly illustrated that, when the banks maintained their liquidity levels following application of the Liquidity Coverage Ratio, they would have lower funding costs and risk, hence increasing the banks' profitability. Originality/Value: This study contributes by investigating the effect of the implementation of the new liquidity standards on the profitability of Saudi Banks.
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