The Impact of Government Credits on Bank Risk and Profitability (Case study: Organization of Islamic Cooperation Countries)

Iranian Journal of Accounting, Auditing and Finance

مقالات آماده انتشار، پذیرفته شده، انتشار آنلاین از تاریخ 15 تیر 1401   

نوع مقاله: Original Article

شناسه دیجیتال (DOI): 10.22067/ijaaf.2022.76093.1127

نویسندگان

Marziyeh Rafiean Esfahani¹؛ Saeed Daei-Karimzadeh^{* 2}؛ مهشید شاهچرا³؛ سارا قبادی⁴

¹Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.

²Associate Professor, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.

³Assistant Professor Monetary and Banking Research Institute, Tehran, Iran.

⁴Assistant Professor, Department of Economics, Isfahan (Khorasgan) Branch, Islamic Azad University, Isfahan, Iran.

چکیده

Profitability and risk indices are considered as useful dependent variables to evaluate the financial and banking system. A bank is stronger than another if it is stable and has higher capacity to absorb risks. This study aimed to investigate the effect of factors affecting the risk and profitability of banks with emphasis on the role of government credit. The statistical Population is all banks during 2005-2019 of central bank databases. In this study, in order to investigate the factors affecting profitability in the banking industry of the Organization of Islamic Cooperation emphasis on the role of government loans and credits were using the system of generalized method of moments (GMM System). The results show that government loans and credits of the previous period have a negative and significant effect on the profitability of banks. In addition, current government loans and credits have a positive and significant effect on risk. The high level of government loans and credits as an indicator of financial development, in addition to the high level of domestic investment, also indicate the development of a country's financial systems. In countries where public sector payments are emphasized by the financial system, transaction costs, risk control and management, and savings mobility are higher than in other countries, and the highest rates are in high-income countries which indicate the role of banks in the financial markets of those countries.

کلیدواژه‌ها

Profitability؛ Risk Management؛ Banking System؛ Government Credits