TAILIEUCHUNG - The impact of bank size on profit stability in China

Hansen’s (1999) panel threshold regression model is applied in this study to investigate the correlation between bank size and bank earnings volatility in 14 Chinese banks. These data were adopted after the Lehman Brothers bankruptcy was announced in 2009Q4. The data used in this study cover the period from 2009Q1 to 2013Q1. The dependent variable is bank earnings volatility, whereas bank size is the independent and threshold variable. Empirical results show the significance of a single threshold on bank size and return on asset (ROA) earnings volatility. Bank size and ROA earnings volatility are positively correlated when the bank size is less than or equal to 733,211,391 CNY. However, such bank size does not reach significant levels. By contrast, bank size slope and ROA earnings volatility is − significant at levels when bank size is more than 733,211,391 CNY. Specifically, a larger bank size means less bank earnings volatility. Regarding return on equity (ROE), empirical results show an insignificant relationship between bank size and bank earnings volatility. | Journal of Applied Finance Banking vol. 7 no. 2 2017 59-70 ISSN 1792-6580 print version 1792-6599 online Scienpress Ltd 2017 The Impact of Bank Size on Profit Stability in China Tsangyao Chang1 and Chin-Chih Chen2 Abstract Hansen s 1999 panel threshold regression model is applied in this study to investigate the correlation between bank size and bank earnings volatility in 14 Chinese banks. These data were adopted after the Lehman Brothers bankruptcy was announced in 2009Q4. The data used in this study cover the period from 2009Q1 to 2013Q1. The dependent variable is bank earnings volatility whereas bank size is the independent and threshold variable. Empirical results show the significance of a single threshold on bank size and return on asset ROA earnings volatility. Bank size and ROA earnings volatility are positively correlated when the bank size is less than or equal to 733 211 391 CNY. However such bank size does not reach significant levels. By contrast bank size slope and ROA earnings volatility is significant at levels when bank size is more than 733 211 391 CNY. Specifically a larger bank size means less bank earnings volatility. Regarding return on equity ROE empirical results show an insignificant relationship between bank size and bank earnings volatility. JEL classification numbers G32 C33 Keywords Bank Size Bank Earnings Volatility Lehman Brothers 1 Introduction The 2007-2008 global financial crisis also known as economic crisis credit crunch or Wall Street crisis was triggered on August 9 2007. Given the outbreak of the subprime mortgage crisis damaged investor confidence affected subprime mortgages and mortgage-related securities causing liquid crises. By 2008 this economic tsunami had damaged the global economy causing many large-scale financial institutions to collapse or were seized by the government. After the collapse of Lehman Brothers many banks in the States and in Europe suffered from a financial crisis or aggravated .

• Ngân hàng - Tín dụng
• Bank size
• Bank earnings volatility
• Lehman brothers
• Profit stability in China
• Impact of bank size
• Bank regulation
• Bank business models
• Bank capital requirements
• Cost of capital
• Leverage ratio
• Bank profitability
• Equity backing
• Panel data
• Panel data from Bangladesh
• Depends on bank size
• Financial stability
• Commercial banks
• Regulatory capital
• Credit exposure
• Bank funding
• Corporate governance
• Bank competitiveness
• P–R model
• Vietnam’s commercial banks
• Return on assets
• Liquidity risk
• Total assets
• Saudi arabia and Jordan
• Profitability bank
• Return on asset
• Return on equity
• Net interest margin
• Non Performing loan
• Capital adequacy ratio
• Loan to deposit ratio
• Tạp chí khoa học
• Income diversification
• Bank performance
• Business environment factors
• Reproduction
• Cytokinins and Their
• Possible Role
• Seed Size
• Determination
• Nutritional and Proteomic
• Working capital management
• Small and medium size enterprises
• Capital structure
• Egyptian SMEs
• National Bank of Egypt
• Bank efficiency
• Financial crises
• DEAWindow Analysis
• Size adjusted efficiency measure
• Economic dragon
• BMC Plant Biology
• Sampling Genebanks accessions
• Genetic diversity representativeness
• Sample size
• Zea mays L