The profitability of banking sectors in the Asia-Pacific region and their contributions to economic growth
type: CreativeWork
description: The banking sector plays an important role in national economies by directing funds from savers to investors who create additional wealth in the economy. Dietrich and Wanzenried (2011) argue that a country’s economic activities cannot run smoothly if its banking sector is not efficient. Athanasoglou, Brissimis, and Delis (2008) argue that a profitable banking sector is necessary to overcome economic shocks. This study focuses on ten countries in the Asia-Pacific region which are at different stages of economic development. These countries are of particular interest because of their institutional and regulatory characteristics. The banks in these countries are all subject to similar regulations. For example, they are required to maintain minimum capital adequacy ratios according to the Basel Accords. Furthermore, banks in most of the countries are required to maintain certain proportions of their deposits as cash reserves that cannot be lent out. Based on their stage of economic development, each of the ten countries is classified as belonging to one of three categories: small emerging economies, large emerging economies and developed economies. Our study focuses on two important aspects of the banking sector. First, we investigate the extent to which profitable banks make a positive contribution to economic growth. Second, we investigate the determinants of bank profitability. The first part of the thesis investigates the relationship between the profitability of banks and economic growth. In order to investigate this relationship, we use data from ten countries in the Asia-Pacific region for the period from 2004 to 2014. In order to address the research questions, we use different econometric techniques such as linear regressions, nonlinear regressions and Granger causality tests. Our results highlight that a profitable banking sector is an important contributor to economic growth. In contrast to our expectations, we find a negative relationship between the size of…
abstract: The banking sector plays an important role in national economies by directing funds from savers to investors who create additional wealth in the economy. Dietrich and Wanzenried (2011) argue that a country’s economic activities cannot run smoothly if its banking sector is not efficient. Athanasoglou, Brissimis, and Delis (2008) argue that a profitable banking sector is necessary to overcome economic shocks. This study focuses on ten countries in the Asia-Pacific region which are at different stages of economic development. These countries are of particular interest because of their institutional and regulatory characteristics. The banks in these countries are all subject to similar regulations. For example, they are required to maintain minimum capital adequacy ratios according to the Basel Accords. Furthermore, banks in most of the countries are required to maintain certain proportions of their deposits as cash reserves that cannot be lent out. Based on their stage of economic development, each of the ten countries is classified as belonging to one of three categories: small emerging economies, large emerging economies and developed economies. Our study focuses on two important aspects of the banking sector. First, we investigate the extent to which profitable banks make a positive contribution to economic growth. Second, we investigate the determinants of bank profitability. The first part of the thesis investigates the relationship between the profitability of banks and economic growth. In order to investigate this relationship, we use data from ten countries in the Asia-Pacific region for the period from 2004 to 2014. In order to address the research questions, we use different econometric techniques such as linear regressions, nonlinear regressions and Granger causality tests. Our results highlight that a profitable banking sector is an important contributor to economic growth. In contrast to our expectations, we find a negative relationship between the size of…
author: Kumar, Vijay
keywords: Non-performing loans, capital adequacy ratio, bank profitability, bank contribution, financial inclusion
license: https://researchcommons.waikato.ac.nz/bitstreams/65a580d4-b863-4672-9c34-78ea0bd81f10/download
date published: 2018
date modified: 2026-07-24T05:57:46Z
provider: University Waikato
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: The University of Waikato