Organizational-level profitability determinants in commercial banks: Swedish evidence
Purpose The purpose of this paper is to examine organizational-level determinants of commercial bank profitability. Design/methodology/approach Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least...
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Veröffentlicht in: | Journal of economic studies (Bradford) 2018-11, Vol.45 (6), p.1175-1191 |
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description | Purpose
The purpose of this paper is to examine organizational-level determinants of commercial bank profitability.
Design/methodology/approach
Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks.
Findings
The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability.
Practical implications
Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords).
Originality/value
To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks. |
doi_str_mv | 10.1108/JES-07-2017-0182 |
format | Article |
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The purpose of this paper is to examine organizational-level determinants of commercial bank profitability.
Design/methodology/approach
Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks.
Findings
The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability.
Practical implications
Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords).
Originality/value
To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks.</description><identifier>ISSN: 0144-3585</identifier><identifier>ISSN: 1758-7387</identifier><identifier>EISSN: 1758-7387</identifier><identifier>DOI: 10.1108/JES-07-2017-0182</identifier><language>eng</language><publisher>Glasgow: Emerald Publishing Limited</publisher><subject>Bank ; Banking industry ; Banks ; Book value ; Capital ; Commercial banks ; Competition ; Competitive advantage ; Economic analysis ; Economic crisis ; Economic growth ; Economic models ; GDP ; Gross Domestic Product ; Hypotheses ; International finance ; International standards ; Lagrange multiplier ; Literature reviews ; Longitudinal studies ; Organizational-level determinants ; Panel data ; Profitability ; Profits ; Regulation ; Regulation of financial institutions ; Resource-based approach ; Return on assets</subject><ispartof>Journal of economic studies (Bradford), 2018-11, Vol.45 (6), p.1175-1191</ispartof><rights>Emerald Publishing Limited</rights><rights>Emerald Publishing Limited 2018</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c382t-1a77f09243a4f5adce8ac9bfd248fcefa6762c27359edee8af1607f1b5f03ad53</citedby><cites>FETCH-LOGICAL-c382t-1a77f09243a4f5adce8ac9bfd248fcefa6762c27359edee8af1607f1b5f03ad53</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.emerald.com/insight/content/doi/10.1108/JES-07-2017-0182/full/html$$EHTML$$P50$$Gemerald$$H</linktohtml><link.rule.ids>230,314,780,784,885,967,11635,27924,27925,52689</link.rule.ids><backlink>$$Uhttps://urn.kb.se/resolve?urn=urn:nbn:se:miun:diva-35044$$DView record from Swedish Publication Index$$Hfree_for_read</backlink></links><search><creatorcontrib>Öhman, Peter</creatorcontrib><creatorcontrib>Yazdanfar, Darush</creatorcontrib><title>Organizational-level profitability determinants in commercial banks: Swedish evidence</title><title>Journal of economic studies (Bradford)</title><description>Purpose
The purpose of this paper is to examine organizational-level determinants of commercial bank profitability.
Design/methodology/approach
Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks.
Findings
The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability.
Practical implications
Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords).
Originality/value
To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks.</description><subject>Bank</subject><subject>Banking industry</subject><subject>Banks</subject><subject>Book value</subject><subject>Capital</subject><subject>Commercial banks</subject><subject>Competition</subject><subject>Competitive advantage</subject><subject>Economic analysis</subject><subject>Economic crisis</subject><subject>Economic growth</subject><subject>Economic models</subject><subject>GDP</subject><subject>Gross Domestic Product</subject><subject>Hypotheses</subject><subject>International finance</subject><subject>International standards</subject><subject>Lagrange multiplier</subject><subject>Literature reviews</subject><subject>Longitudinal studies</subject><subject>Organizational-level determinants</subject><subject>Panel data</subject><subject>Profitability</subject><subject>Profits</subject><subject>Regulation</subject><subject>Regulation of financial institutions</subject><subject>Resource-based approach</subject><subject>Return on assets</subject><issn>0144-3585</issn><issn>1758-7387</issn><issn>1758-7387</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2018</creationdate><recordtype>article</recordtype><sourceid>AFKRA</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><recordid>eNptkctLAzEQh4MoWB93jwueYyfJptl6K_WN4MHHNcxmJxrdR022Ff3r3VIRBE9zmO_3g_mGsSMBJ0JAMb45v-dguARhOIhCbrGRMLrgRhVmm41A5DlXutC7bC-lVwDQCuSIPd7FZ2zDF_aha7HmNa2ozhax86HHMtSh_8wq6ik2ocW2T1loM9c1DUUXsM5KbN_SaXb_QVVILxmtQkWtowO247FOdPgz99njxfnD_Irf3l1ez2e33KlC9lygMR6mMleYe42VowLdtPSVzAvvyOPETKSTRukpVTQsvZiA8aLUHhRWWu0zvulNH7RYlnYRQ4Px03YY7Fl4mtkuPtsmLFurNOT5wB9v-OHA9yWl3r52yzjcnawUShqZC6UGCjaUi11KkfxvrwC7lm0H2RaMXcu2a9lDZLyJ0GAG6-q_xJ_3qG-QBoJ6</recordid><startdate>20181112</startdate><enddate>20181112</enddate><creator>Öhman, Peter</creator><creator>Yazdanfar, Darush</creator><general>Emerald Publishing Limited</general><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>0U~</scope><scope>1-H</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>8AO</scope><scope>8BJ</scope><scope>8FI</scope><scope>AFKRA</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FQK</scope><scope>FYUFA</scope><scope>F~G</scope><scope>JBE</scope><scope>K6~</scope><scope>K8~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M0T</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>Q9U</scope><scope>ADTPV</scope><scope>AOWAS</scope><scope>DG5</scope></search><sort><creationdate>20181112</creationdate><title>Organizational-level profitability determinants in commercial banks: Swedish evidence</title><author>Öhman, Peter ; Yazdanfar, Darush</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c382t-1a77f09243a4f5adce8ac9bfd248fcefa6762c27359edee8af1607f1b5f03ad53</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2018</creationdate><topic>Bank</topic><topic>Banking industry</topic><topic>Banks</topic><topic>Book value</topic><topic>Capital</topic><topic>Commercial banks</topic><topic>Competition</topic><topic>Competitive advantage</topic><topic>Economic analysis</topic><topic>Economic crisis</topic><topic>Economic growth</topic><topic>Economic models</topic><topic>GDP</topic><topic>Gross Domestic Product</topic><topic>Hypotheses</topic><topic>International finance</topic><topic>International standards</topic><topic>Lagrange multiplier</topic><topic>Literature reviews</topic><topic>Longitudinal studies</topic><topic>Organizational-level determinants</topic><topic>Panel data</topic><topic>Profitability</topic><topic>Profits</topic><topic>Regulation</topic><topic>Regulation of financial institutions</topic><topic>Resource-based approach</topic><topic>Return on assets</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Öhman, Peter</creatorcontrib><creatorcontrib>Yazdanfar, Darush</creatorcontrib><collection>CrossRef</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>Access via ABI/INFORM (ProQuest)</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ProQuest Pharma Collection</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>Hospital Premium Collection</collection><collection>ProQuest Central UK/Ireland</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>International Bibliography of the Social Sciences</collection><collection>Health Research Premium Collection</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>International Bibliography of the Social Sciences</collection><collection>ProQuest Business Collection</collection><collection>DELNET Management Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>Healthcare Administration Database</collection><collection>ProQuest One Business</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest Central Basic</collection><collection>SwePub</collection><collection>SwePub Articles</collection><collection>SWEPUB Mittuniversitetet</collection><jtitle>Journal of economic studies (Bradford)</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Öhman, Peter</au><au>Yazdanfar, Darush</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Organizational-level profitability determinants in commercial banks: Swedish evidence</atitle><jtitle>Journal of economic studies (Bradford)</jtitle><date>2018-11-12</date><risdate>2018</risdate><volume>45</volume><issue>6</issue><spage>1175</spage><epage>1191</epage><pages>1175-1191</pages><issn>0144-3585</issn><issn>1758-7387</issn><eissn>1758-7387</eissn><abstract>Purpose
The purpose of this paper is to examine organizational-level determinants of commercial bank profitability.
Design/methodology/approach
Using bank-level longitudinal panel data for the 2005–2014 period, this study conducts univariate and multivariate statistical analyses, i.e. ordinary least squares (OLS), fixed-effects and feasible generalized least-squares (FGLS) regressions, to analyze profitability variables in Swedish commercial banks.
Findings
The findings indicate that the organizational-level determinants growth, lagged profitability and capital adequacy are positively related to banks’ current profitability. No relationship was found between banks’ size and their profitability. Moreover, no relationship was found between the macroeconomic control variable gross domestic product (GDP) and bank profitability.
Practical implications
Given that organizational-level determinants explain sustainable bank profitability, the findings can be used by bank managers as a basis for low-risk bank policy formulation, and by regulators in monitoring banks relative to international standards (i.e. the Basel Accords).
Originality/value
To the best of the authors’ knowledge, this is the first study to investigate determinants of bank profitability in Sweden, a country with a strong tradition of bank-based financing, with previous experience of a domestic bank crisis in the 1990s, and where the recent global financial crisis had relatively little impact on domestic banks.</abstract><cop>Glasgow</cop><pub>Emerald Publishing Limited</pub><doi>10.1108/JES-07-2017-0182</doi><tpages>17</tpages></addata></record> |
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subjects | Bank Banking industry Banks Book value Capital Commercial banks Competition Competitive advantage Economic analysis Economic crisis Economic growth Economic models GDP Gross Domestic Product Hypotheses International finance International standards Lagrange multiplier Literature reviews Longitudinal studies Organizational-level determinants Panel data Profitability Profits Regulation Regulation of financial institutions Resource-based approach Return on assets |
title | Organizational-level profitability determinants in commercial banks: Swedish evidence |
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