2012
DOI: 10.1108/01443581211274610
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Abstract: This study examines the determinants of bank profitability in China over the period [2003][2004][2005][2006][2007][2008][2009]. The determinants are divided into three groups: bank-specific, industryspecific and macroeconomic variables. The two-step General Method of Moments (GMM) system estimator is used. The results show that there is a positive relationship between bank profitability, cost efficiency, banking sector development, stock market development and inflation. We report that low profitability can be… Show more

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Cited by 189 publications
(167 citation statements)
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References 57 publications
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“…For macro-economic determinants, a real gross domestic product (RGDP) has a negative and insignificant impact on return on assets (ROA). This result supports previous studies of Masood et al (2012) whereas inflation have a positive and insignificant effect on return on assets (ROA) supporting (Guru et al, 2002;Jiang, Tang, Law, & Sze, 2003;Pasiouras & Kosmidou, 2007;Sufian, 2009;García-Herrero, Gavilá, & Santabárbara, 2009;Tan & Floros, 2012) findings.…”
Section: Loans To Total Asset (Aqlt)supporting
confidence: 90%
See 1 more Smart Citation
“…For macro-economic determinants, a real gross domestic product (RGDP) has a negative and insignificant impact on return on assets (ROA). This result supports previous studies of Masood et al (2012) whereas inflation have a positive and insignificant effect on return on assets (ROA) supporting (Guru et al, 2002;Jiang, Tang, Law, & Sze, 2003;Pasiouras & Kosmidou, 2007;Sufian, 2009;García-Herrero, Gavilá, & Santabárbara, 2009;Tan & Floros, 2012) findings.…”
Section: Loans To Total Asset (Aqlt)supporting
confidence: 90%
“…They further concluded that Lebanese commercial banks have an insignificant impact on profitability. Tan and Floros (2012) identified the profitability of commercial banks in China over the sample period of 2003 to 2009 by using econometric techniques. Results presented by their investigation suggest that the bank size, non-traditional activity and taxation are negatively associated with banks' profitability, while Chinese banks are positively associated with high cost and high inflation rates.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Perry (1992) observed that the extent to which inflation affects bank profitability depends on whether the inflation expectations are fully anticipated. More recently, Yong and Floros (2012) examined the effects of inflation on bank profitability, while controlling for comprehensive bank-specific and industry-specific variables. The positive relationship found between inflation and profitability in the Chinese banking sector reflects the fact that the inflation in China can be fully anticipated and the interest rates adjusted accordingly.…”
Section: Macroeconomic Factorsmentioning
confidence: 99%
“…It reflects how efficient the bank management is in operating at a low cost, thus a negative relationship is expected. However, others find a positive relationship which could be due to higher salaries paid to personnel which is reflected in improvements in productivity and therefore higher profitability (Tan & Floros, 2012b).…”
Section: Bank-specific Determinantsmentioning
confidence: 99%
“…Diversification leads to economies of scope which results in lower costs and higher profits (Tan & Floros, 2012b). …”
Section: Bank-specific Determinantsmentioning
confidence: 99%