Determinants of Profitability of China's Domestically Listed Commercial Banks: Panel Evidence for the Period between 2007-2012
Chao Zhou, Thongdee Kijboonchoo
Abstract
Chao Zhou, Thongdee Kijboonchoo
Abstract
The purpose of this study is to explore the determinants of 16 China domestically listed commercial banks' profitability over period 2007-2012. This research selects the net interest margin, profit margin and Tobin's q as proxies of the bank profitability, which are measured by three categories: internal determinants, industry-specific determinants and macroeconomic determinants. Panel data model was used to analyze how the determinants affecting the bank's profitability and some recommendations of improving the bank's profitability are provided. Keywords—Commercial Banks, Profitability, Fixed Effect Model, Panel Data, Tobin’s q
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The purpose of this study is to explore the determinants of 16 China domestically listed commercial banks' profitability over period 2007-2012. This research selects the net interest margin, profit margin and Tobin's q as proxies of the bank profitability, which are measured by three categories: internal determinants, industry-specific determinants and macroeconomic determinants. Panel data model was used to analyze how the determinants affecting the bank's profitability and some recommendations of improving the bank's profitability are provided. Keywords—Commercial Banks, Profitability, Fixed Effect Model, Panel Data, Tobin’s q
Key concepts: Profitability index, Panel data, Net interest margin, Profit margin, Margin (machine learning), Profit (economics), Business, China