{"title":"Role of Disciplinary Tools in Maintaining Bank Performance and Financial Stability: Evidence from Emerging Economies","authors":"Anjali Sain, Smita Kashiramka","doi":"10.1177/09726527231183015","DOIUrl":null,"url":null,"abstract":"The aim of this study is to examine the role of disciplinary tools, that is, capital adequacy requirement and market discipline in maintaining the banks’ performance and financial stability. The study employs a panel dataset of 600 commercial banks from BRICS economies for the period ranging from 2005 to 2020 using the panel regression. The robustness of the results is validated using the system GMM (generalized method of moments). The study reveals that, in a linear model, capital adequacy ratio has a positive influence on performance and stability, and market discipline has a negative influence on performance and stability. In a non-linear model, capital adequacy ratio has a concave relationship. Further, the study discusses the critical determinants of profitability and stability. JEL Classification: G21, G28, G32","PeriodicalId":44100,"journal":{"name":"Journal of Emerging Market Finance","volume":null,"pages":null},"PeriodicalIF":1.2000,"publicationDate":"2023-08-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Emerging Market Finance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1177/09726527231183015","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
The aim of this study is to examine the role of disciplinary tools, that is, capital adequacy requirement and market discipline in maintaining the banks’ performance and financial stability. The study employs a panel dataset of 600 commercial banks from BRICS economies for the period ranging from 2005 to 2020 using the panel regression. The robustness of the results is validated using the system GMM (generalized method of moments). The study reveals that, in a linear model, capital adequacy ratio has a positive influence on performance and stability, and market discipline has a negative influence on performance and stability. In a non-linear model, capital adequacy ratio has a concave relationship. Further, the study discusses the critical determinants of profitability and stability. JEL Classification: G21, G28, G32
期刊介绍：
The Journal of Emerging Market Finance is a forum for debate and discussion on the theory and practice of finance in emerging markets. While the emphasis is on articles that are of practical significance, the journal also covers theoretical and conceptual aspects relating to emerging financial markets. Peer-reviewed, the journal is equally useful to practitioners and to banking and investment companies as to scholars.
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