THE RELATIONSHIPS BETWEEN G7 COUNTRIES BANKS CAPITAL ADEQUACY RATIOS AND PROFITABILITIES

Journal Title: Business, Economics and Management Research Journal - Year 2018, Vol 1, Issue 1

Abstract

Research topic is about the relationship between G7 countries’ banks capital adequacy ratios and return on asset ratios. By using panel data analysis techniques, the short-term relationship G7 countries’ banks capital adequacy ratios and return on asset ratios will be found. In addition, by using ARDL model, the long-term relationship between capital adequacy and return on asset ratios will be found. By using Hausman test, it has been found that there is random effect in the model. Since random effect model is used, specific country effect and specific time effect is included in the model. By looking at lowest AIC scores, optimum ARDL model was chosen. When analysis is done for G7 countries’ banks panel data, it was observed that capital adequacy ratio has significant negative impact on return on asset ratios for the period between 2000-2015. UK and years of 2004, 2005, 2006 has significant impact in the model. In addition to that, it was observed that capital adequacy ratios have significant and negative impact on return on asset ratios for the long term.

Authors and Affiliations

Hüseyin ÇETİN

Keywords

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  • EP ID EP361333
  • DOI -
  • Views 86
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How To Cite

Hüseyin ÇETİN (2018). THE RELATIONSHIPS BETWEEN G7 COUNTRIES BANKS CAPITAL ADEQUACY RATIOS AND PROFITABILITIES. Business, Economics and Management Research Journal, 1(1), 31-37. https://europub.co.uk/articles/-A-361333