Explaining the Threshold Effects of Capital Requirements, Competition, and Management Efficiency on the Financial Stability of Banks Listed on the Tehran Stock Exchange

Explaining the Threshold Effects of Capital Requirements, Competition, and Management Efficiency on the Financial Stability of Banks Listed on the Tehran Stock Exchange

Subject Areas : Financial Knowledge of Securities Analysis

Mohammad Motlagh ¹ , faegh ahmadi ² , Mohamad Hosein Ranjbar ³

1 - PhD student in Economics, Science and Research Branch, Qeshm International Education Center, Qeshm, Iran
2 - Assistant Professor, University of Qeshm, Qeshm, Iran. (Corresponding Author).
3 - Associate Professor, Department of Accounting and Financial Management, Bandar Abbas Branch, Islamic Azad University, Bandar Abbas, Iran

Received: 2024-12-02 Accepted : 2025-01-26 Published : 2025-09-21

Keywords: Capital requirements, Competitiveness index, Management efficiency, Financial stability, Listed banks, Threshold model,

Abstract :

The banking industry is considered one of the most important sectors of the country's economy, which can provide the grounds for economic growth and prosperity by organizing and managing its resources and expenditures appropriately. Considering the relationship between the banking system's performance and the country's macroeconomic sectors, any instability and crisis in it can cause fluctuations and disruptions in macroeconomic variables, especially production. Therefore, emphasizing its financial intermediation role, examining and ensuring the stability and soundness of the banking system is important. In general, banking stability and soundness indicators are used to examine and ensure the stability and soundness of the banking system.

The purpose of this article is to explain the threshold effects of capital requirements, competition, and management efficiency on the financial stability of banks listed on the Tehran Stock Exchange. For this purpose, a threshold approach model (STAR) was used based on annual data of selected banks listed on the stock exchange during the period 1390 to 1402. Using a PSTR model in which the transmission variable is the competitiveness index, the financial stability function and the effect of capital requirements, competition and management efficiency on the financial stability of banks listed on the Tehran Stock Exchange are modeled. Given the confirmation of the nonlinear model, the results of the nonlinear part of the model are analyzed. 

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