A Panel Regression Analysis to Determine Returns on Assets of Banks in Ghana

Abstract

This article aimed at examining the determinants of the returns on assets of banks using a panel regression analysis. The explanatory variables considered in the regression model were Capital Adequacy, Assets Quality, Management Quality and Liquidity Ratio. The effects of the explanatory variables on the returns on assets were explored by fitting a panel multiple regression model to the data. The results of the study show that the observed returns across the banks do not change over time, thus indicating that the series is stationary. There is evidence of significant differences across the banks considered for the study, hence the use of Random effects model. All the explanatory variables considered in the study including the intercept were found to have significant effects statistically on the returns on assets across the banks. About 73% of the variations in the returns on assets across the banks can be accounted for by the independent variables.

Environmental Disclosure Practices and Sustainable Performance of Quoted Manufacturing Companies in Nigeria

“…Returns on Assets (ROA) in this case refers to the profitability index which shows the extent to which an organization has been able to generate sufficient returns from the use of its corporate resources [33][34][35]. It is obtained by dividing business earnings by the sum total of organizational assets.…”