zohreh eskandaripour; marzieh esfandiari; nazar dahmarde; Mohammad Hassan Fotros
Abstract
Given the dependence of the country's economy on banks as the most important source of financing for companies, it is important to study the factors affecting the performance of the banking system; Therefore, in this study, the effect of exchange rate shocks, crude oil prices, total stock index and government ...
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Given the dependence of the country's economy on banks as the most important source of financing for companies, it is important to study the factors affecting the performance of the banking system; Therefore, in this study, the effect of exchange rate shocks, crude oil prices, total stock index and government budget on the performance (profitability) of the country's banking system in the form of 12 scenarios based on the profitability response of the banking network to 2%, 5% and 10 Shock% was addressed in the mentioned variables. For this purpose, research data were collected from the SAM matrix of the Majles Research Center in 2011 and the data-output table of the Central Bank in 2016. Also, the dynamic recursive dynamic calculus model (RDCGE) and Math Lab software were used to analyze the data. The results showed that the informal exchange rate and crude oil prices have an inverse effect and the total government stock index and budget have a direct effect on the profitability of the banking network; So that if a positive shock of 2%, 5% and 10% is applied to the informal exchange rate, the profitability of the banking network will decrease to a maximum of 1.73, 2.01 and 2.57%, respectively. Also, if a positive shock of 2%, 5% and 10% is applied to the price of crude oil, the profitability of the banking network will decrease to a maximum of 1.41, 1.63 and 2.03%, respectively. In addition, if a positive shock of 2%, 5% and 10% enters the total stock index, the profitability of the banking network will increase to a maximum of 0.47, 0.97 and 1.52%, respectively. Finally, if a positive shock of 2%, 5% and 10% enters the government budget, the profitability of the banking network will increase to a maximum of 0.38, 0.44 and 0.61%, respectively.
mohamad hasan fotros; mehdi ferdosi; saeed isazadeh; hamid sepehrdost
Abstract
Introduction
In most of countries, banks are one of the important parts of the financial system and have a considerable role as fiscal intermediates on getting economic growth and development.Generally, in every country, banks are the main basics of banking system especially in developing countries ...
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Introduction
In most of countries, banks are one of the important parts of the financial system and have a considerable role as fiscal intermediates on getting economic growth and development.Generally, in every country, banks are the main basics of banking system especially in developing countries where capital markets are not developed; hence, evaluating banks’ performance is important. Competition and risk are two important factors that have effect on performance. In Iran, along with entry of private banks, demands for different types of bank services has increased in that banks are looking for more proportion of market share and more profitability.
The goal of the present research is to analyze profitability, as a performance index, of banking system in Iran. This research can be distinguished from former studies in that it uses variables like diversification index of bank operations, capital market development, and manpower productivity.
Theoretical Framework
In general, there are three theories that explain the relationship between market structure and performance. These theories are SCP hypothesis, efficient-structure hypothesis, and quiet life hypothesis.
The SCP view represents a positive relationship between profitability and market concentration since banks can collude and get a more profit.
Efficient-structure theory was first coined by Demsetz in 1973. He said that bank profitability is extracted from efficiency. He maintained that more efficient banks have a more ability to increase its market shares and sizes that let them be more concentrated and gain higher profit.
The quiet-life hypothesis predicts a negative relation between concentration and profitability in which the firms with a higher market power tend to be inefficient so that its authorities and managers just charge the monopolistic profit and do not make an considerable effort.
Methodology
This research investigates profitability determinants of banking system in Iran during2003-2014.To this aim, 33 banks were selected. Two softwares, namely, Eviews.7 and Stata.14 were used. According to the Tan model (2015), the equation includes:
Where:
ROA: return on assets (profitability index)
Liq: liquidity index
Div: diversification index
Com: index of expenditure management
Pro: manpower productivity
Risk: risk index
HHI: concentration index (Herfindahl- Hirschman)
Cmd: development index of capital market
Results & Discussion
Before estimating the model, test of stationarity must be done. The results of four stationarity tests (LLC, IPS, ADF-Fischer and PP-Fischer) shows that all the variables are stationary.
Homogeneity test should be done in the next step.
Considering autocorrelation and heteroskedasticity problems in model, GLS method should be used for estimation.
The results show that all the coefficient are significant, statiscally. The probability of F-statistic represents that the regression is significant, generally. The R-squred statistic indicates 99 percent of dependent variable variations be explained by the regressors. Variables liquidity, diversification and risk have got a negative effect while the rest, have influenced profitability, positively. When the risk increases one unite, profitability would decreases 0.009 unit.With regard to concentration coefficient, it influences profitability,positively. In other words, SCP hypothesis be confirmed in banking system of Iran. The coefficient of HHI shows that if concentration in banking system increase one unit, profitability would increases 0.193.
Conclusion & Suggestions
This research investigated the determinants of banking profitability in Iran with respectto market structure and risk variables. The results gained using fixed effect and GLS procedures showed that both hypotheses were confirmed,and that concentration influenced profitability positively while risk had a negative effect on it.
Considering the results, the following suggestions are made:
1.Negative sign of the diversification index shows that it is better that banks focus on traditional activities (giving loans).
2.Concentration influences profitability positively; hence, banks should increase proportions from the market.
3.The sign of risk index shows that banks should pay attention to quality of loans or paying them back will be delayed.
4.The positive coefficient of productivity represents the importance of this factor in that banks should protect their staff through several ways like education, and issueslike peyments and salary so thatit can lead to productivity and finally profitability.
Mohammad Hassan Fotros; Ali Dalei Milan
Abstract
Falls in Iran's oil revenues necessitate relying more on taxation to finance public sector. So, underground economy and tax evasion and changing tax rate and its effect on the official and underground production in this way can help policymakers and economic advisers. Tax rates and social security contributions, ...
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Falls in Iran's oil revenues necessitate relying more on taxation to finance public sector. So, underground economy and tax evasion and changing tax rate and its effect on the official and underground production in this way can help policymakers and economic advisers. Tax rates and social security contributions, the two main variables affecting the size of the underground economy and tax evasion. This study used a DSGE model framework for modelling the underground economy and the effect of oil shock, fiscal impulses (such as changing tax rates, social security contributions) and the shock of productivity on the official economy and underground economy. The results of the evaluation showed that the presented model was well able to simulate cyclical behavior and volatility of the variables. a positive shock in the corporate tax rate and income tax rate reduced the official production, increased underground production and tax evasion and decreased government revenue. Positive shock to oil revenues increased official production and reduced underground economy and consequently reduced tax evasion and increased revenue for the government.
Mohammad Hassan Fotros; Hossein Tavakolyian; Reza Maaboudi
Abstract
Abstract
Iran Economy has experienced monetary shocks and rising inflation , in recent years. For this reason, it is expected that monetary shock has a positive effect on inflation. So, the paper studies impact of monetary shock on economic growth and inflation of Iran. The DSGE approach based on New ...
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Abstract
Iran Economy has experienced monetary shocks and rising inflation , in recent years. For this reason, it is expected that monetary shock has a positive effect on inflation. So, the paper studies impact of monetary shock on economic growth and inflation of Iran. The DSGE approach based on New Keynesian School is used to examine the impulse response functions and calculating the endogenous variables moments. To make compatible the model with Iranian economy we take in consideration the price stickiness, oil income, government and central bank balance, and the roll of business banks. Data of the period of 1973-2010 are sourced from CBI. Results indicate that technology shock increases the non-oil production and decreases the inflation. The effects of monetary and oil shocks on real production and on inflation are positive. On the other hand technology and oil shocks increase the economic growth, but monetary shock has no effect on growth.
Mohammad Hassan Fotros; Reza Maaboudi
Abstract
This paper investigates asymmetric behaviors of income inequality and consumption expenditures inequalities, the relationships between them and sketches their trends in the Iranian Households’ survey for the period of 1979 to 2006.
For this purpose, and to analyze the relationships between variables ...
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This paper investigates asymmetric behaviors of income inequality and consumption expenditures inequalities, the relationships between them and sketches their trends in the Iranian Households’ survey for the period of 1979 to 2006.
For this purpose, and to analyze the relationships between variables panel data methodology was employed.
Results indicate that all the fluctuations of income inequality do not transmit into the composition of consumption expenditure. Therefore, there is an asymmetric relationship between these variables.
Mohammad Hasan Fotros; Hamed Mansoori; Majed Shabani
Abstract
با توجه به ارتباط نزدیک بین مصرف انرژی از جمله انرژی الکتریسیته و رشد اقتصادی در جهان، تعیین کمّ و کیف رابطه بین مصرف انرژی الکتریسیته و رشد اقتصادی در ایران میتواند ...
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با توجه به ارتباط نزدیک بین مصرف انرژی از جمله انرژی الکتریسیته و رشد اقتصادی در جهان، تعیین کمّ و کیف رابطه بین مصرف انرژی الکتریسیته و رشد اقتصادی در ایران میتواند در تبیین سیاستهای بخش انرژی کشورکمک مؤثری بنماید. این مقاله به بررسی وجود رابطه علّیت گرنجری بین انرژی الکتریسیته و تولید ناخالص داخلی در ایران طی سالهای 2006-1967 میپردازد و چگونگی آن را تشریح میکند. بدین منظور، ابتدا به بررسی مانایی متغیرهای مصرف الکتریسیته و رشد تولید ناخالص داخلی با استفاده از آزمونهای دیکیفولر و فیلیپس پرون میپردازیم. سپس، از روشتودا و یاماموتو رابطۀ علّی بین آنها آزمون میشود. نتایج بدست آمده، نشان میدهد که در ایران رشد اقتصادی مقدم بر مصرف انرژی الکتریسیته است. بنابراین، میتوان بدون کاستن از رشد اقتصادی، سیاست صرفهجویی را در زمینه این نوع انرژی دنبال کرد.
