Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector

Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector

The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks...

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Main Author: Sufian, Fadzlan
Format: Article
Language:English
Published: Routledge 2009
Subjects:
HG1501 Banking
Online Access:http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/1/JAPB_%28Final%29.pdf
id iium-5240
recordtype eprints
spelling iium-52402011-12-07T08:47:37Z http://irep.iium.edu.my/5240/ Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector Sufian, Fadzlan HG1501 Banking The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks (SOCBs) and the 12 Joint Stock Commercial Banks (JSCBs) during the post-reform period of 2000–2007. The empirical findings of this study suggest that size, credit risk, and capitalization are positively related to the profitability of China banks, whereas liquidity, overhead costs, and network embeddedness have negative impacts. However, the impact of liquidity is not uniform across bank types. We find that the SOCBs with higher level of liquidity tend to be relatively more profitable, which could be vindicated by the significant amount of lending to the State Owned Enterprises. The impact of economic growth and inflation are always positive whether we examine the SOCB or the JSCB. Routledge 2009 Article PeerReviewed application/pdf en http://irep.iium.edu.my/5240/1/JAPB_%28Final%29.pdf Sufian, Fadzlan (2009) Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector. Journal of Asia-Pacific Business, 10 (3). pp. 281-307. ISSN 1059-9231 (print); 1528-6940 (online) http://www.tandf.co.uk/journals/WAPB DOI: 10.1080/10599230903340205
repository_type Digital Repository
institution_category Local University
institution International Islamic University Malaysia
building IIUM Repository
collection Online Access
language English
topic HG1501 Banking
spellingShingle HG1501 Banking
Sufian, Fadzlan
Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
description The Chinese banking sector has undergone noteworthy financial reforms, which significantly metamorphosed the banking system. This article seeks to examine the determinants of the profitability of the Chinese banking sector. The empirical analysis is confined to the four State Owned Commercial Banks (SOCBs) and the 12 Joint Stock Commercial Banks (JSCBs) during the post-reform period of 2000–2007. The empirical findings of this study suggest that size, credit risk, and capitalization are positively related to the profitability of China banks, whereas liquidity, overhead costs, and network embeddedness have negative impacts. However, the impact of liquidity is not uniform across bank types. We find that the SOCBs with higher level of liquidity tend to be relatively more profitable, which could be vindicated by the significant amount of lending to the State Owned Enterprises. The impact of economic growth and inflation are always positive whether we examine the SOCB or the JSCB.
format Article
author Sufian, Fadzlan
author_facet Sufian, Fadzlan
author_sort Sufian, Fadzlan
title Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
title_short Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
title_full Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
title_fullStr Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
title_full_unstemmed Determinants of bank profitability in a developing economy: empirical evidence from the China banking sector
title_sort determinants of bank profitability in a developing economy: empirical evidence from the china banking sector
publisher Routledge
publishDate 2009
url http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/
http://irep.iium.edu.my/5240/1/JAPB_%28Final%29.pdf
first_indexed 2023-09-18T20:13:44Z
last_indexed 2023-09-18T20:13:44Z
_version_ 1777407648433438720

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