2012
DOI: 10.1108/10867371211246885
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Abstract: This paper evaluates the determinants of bank performance in China. In particular, we examine the effects of stock market volatility, competition and ownership on bank performance in China. The sample comprises a total of 11 banks (four state-owned and seven joint-stock commercial banks) listed in the Chinese Stock Exchanges. The period under consideration extends from [2003][2004][2005][2006][2007][2008][2009]. The Generalized Methods of Moments (GMM) difference and system estimators are applied. Empirical re… Show more

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Cited by 44 publications
(38 citation statements)
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“…The literature posits that higher loan loss provisions imply lower profitability because higher provisions for loan losses signal higher risk and higher probability of loans becoming non-performing loans (Athanasoglou et al, 2008;Kosmidou, 2008). This has been confirmed by Tan and Floros (2012), who observe that credit risk is negatively and significantly related to bank performance in China. On the flip side, credit risk can be measured by the loans-to-asset ratio.…”
Section: Empirical Studies On Bank Profitabilitymentioning
confidence: 75%
“…The literature posits that higher loan loss provisions imply lower profitability because higher provisions for loan losses signal higher risk and higher probability of loans becoming non-performing loans (Athanasoglou et al, 2008;Kosmidou, 2008). This has been confirmed by Tan and Floros (2012), who observe that credit risk is negatively and significantly related to bank performance in China. On the flip side, credit risk can be measured by the loans-to-asset ratio.…”
Section: Empirical Studies On Bank Profitabilitymentioning
confidence: 75%
“…Studies have also been performed on Chinese bank's profitability (Tan and Floros 2012c;Tan 2016;Tan andFloros 2012a, 2012b;García-Herrero et al 2009;Heffernan and Fu 2008;Sufian and Habibullah 2009). A Study by Tan (2016) used ROA, ROE, NIM and PM as profitability indicators and categorized explanatory variables into bank-specific, industry-specific and macroeconomic variables in his study of 41 Chinese banks including joint-stock, state-owned, and city commercial banks over the period 2003-2011.…”
Section: Literature Reviewmentioning
confidence: 99%
“…Banking Sector Development (BSD): It is calculated as the total assets of the banking industry to GDP ratio. This variable is widely used in the literature (Lee et al 2015;Tan 2016;Tan and Floros 2012a, 2012b, 2012c. The more developed banking sector indicates the demand for banking product and services which attracts more competition, and banks can increase their profitability with effective strategies (Tan and Floros 2012a).…”
Section: Profitability Determinantsmentioning
confidence: 99%
“…Due to the fluctuation of the Page42 stock market volatility, consumers are more likely to deposit their money into banks than investing in the stock market which makes banks have better performance (Albertazzi & Gambacorta, 2010). Tan and Floros (2012) find that the more volatile the stock market, the better performance the Chinese banks have. A high market capitalization ratio means economic expansion, while the easy access for firms to finance through stock markets reduces bank's business opportunities which results in a deterioration of performance (Liu & Wilson, 2009).…”
Section: Page40mentioning
confidence: 99%