Advances and Applications in Statistics
Volume 61, Issue 1, Pages 77 - 87
(March 2020) http://dx.doi.org/10.17654/AS061010077 |
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PROFITABILITY OF COMMERCIAL BANKS: APPLYING GMM
Thu-Trang Thi Doan
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Abstract: The purpose of this study is to identify the factors affecting the profitability of commercial banks in Vietnam. For this purpose, the study has applied the regression methods on table data, including: pooled regression (OLS), fixed effects model (FEM), random effects model (REM), followed by generalized method of moment (GMM) to ensure the reliable results. The data used for the study is collected from the financial statements of 22 Vietnamese commercial banks for the period of 2011-2018. The study results show that the characteristics of banks such as capital structure (CAP), loan ratio (LOAN) and liquidity ratio (LIQ) have a positive impact on the profitability of commercial banks. In addition, the study has also found a positive and statistically significant impact of inflation rate on the profitability of commercial banks, which is also the new point of the article compared to the previous studies. |
Keywords and phrases: profitability, commercial bank, GMM, Vietnam.
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