Volume 10, Issue 1 (Winter 2015)                   J. Mon. Ec. 2015, 10(1): 107-129 | Back to browse issues page

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Ebrahimi M, Arshadi A, Salimi M S. Effective Factors on Bank Profitability in Iran. J. Mon. Ec. 2015; 10 (1) :107-129
URL: http://jme.mbri.ac.ir/article-1-190-en.html
1- Faculty of Economics and Management, Islamic Azad University of Shiraz
2- Monetary and Banking Research Institute (MBRI)
3- Islamic Azad University of Shiraz
Abstract:   (3310 Views)

Not only in Iran, but throughout the world, banks and banking industry are considered as very important parts of the economy. This study seeks to investigate the impact of the internal characteristics of banks, the structure of the banking industry and the economic situation of Iran on the profitability of the banking system of Iran by exploring the theory of the Structuralism school concerning the impact of structure on profitability. To this end, data relating to 18 private and public banks of Iran during 2003 to 2012 are analyzed by using panel data methods. First, the profitability of the banking system is calculated using relevant indicators; and then, the impact of various internal, structural and environmental factors on bank profitability is evaluated. The results show that internal factors - the amount of capital and the size of the bank - have a positive impact on profitability. Besides, structural factors including market share and concentration are shown to have a positive impact on profitability whereas ownership appears to have no significant impact. Furthermore, inflation and economic cycles – among environmental factors – exhibit a positive impact on profitability.

JEL Classifications: C23, D22, L22, L25

Full-Text [PDF 885 kb]   (2781 Downloads)    
Type of Study: Original Research - Theoric | Subject: Macroeconomics
Received: 7 Dec 2015 | Accepted: 6 Jul 2016 | Published: 15 Jan 2015

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