Effects of Macroeconomic Variables and Market Power on Banking Sector's Deposits (Weighted Least Square in Dynamic Panel Data Approach)
Subject Areas : business managementmahboubeh shakiba 1 , alireza daghighiasli 2 , marjan damankeshideh 3 , majid afsharirad 4 , Ali Esmaeelzadeh Maghari 5
1 - Department of Economic, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Economic, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
3 - Department of Economic, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
4 - Department of Economic, Kharazmi University, Tehran, Iran
5 - Department of Financial Management, Central Tehran Branch, Islamic Azad University, Tehran, Iran
Keywords: Macroeconomic Variables, : Market Power, Weighted Least Square Approach, Dumitrescu-Hurlin Causality Test,
Abstract :
The most important role of bank deposits in the country's economy is to provide the necessary grounds for investment. Market power specifies how firms in a market influence prices, and reveals the level of competition in the market. Hence, the main aim of this paper is to investigate the impact of market power and macroeconomic variables effects on banking deposits in Iranian deposit money market using dynamic Bresnahan-Lau’s and weighted average least square approach for the 18 bank in the Iran industrial banking sector. Annual data for the period of 2008-2017 has been collected from annual financial statements of Iranian banks, Statistical Centre of Iran, Monetary and Banking Research Institute of Iran and central bank of Iran. The main empirical results indicated that the nominal exchange rate and liquidity money have negative and other extracted macroeconomics variables have positive and significant effects on the deposits of banking sector during the period of study. Moreover, the Dumitrescu-Hurlin panel Granger Causality tests confirmed the unilateral causality from macroeconomics variables and market power to the bank's deposits.
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