Sustainable banking regulations pre and during coronavirus outbreak: the moderating role of financial stability

Figures & data

Table 1. Operational definition and measurement of variables.

Variables	PROXY	Definition
Dependent variables
Return on assets	ROAit	Net income to total assets.
Return on equity	ROEit	Net income to total equity.
Tobin’s Q	TQit	Market value of equity added to the book value of the debt over the book value of the total assets
Moderating variable
Financial stability	FSit	Ratio of Earnings before Interest and Tax to Total Taxes
Independent and control variables
Capital adequacy ratio	CARit	The ratio of Tier1 capital + Tier2 capital to the average risk-weighted assets.
Total-debt ratio	TDit	Ratio of total debt (short & long-term) to total assets.
Long-term debt ratio	LTDit	Ratio of long-term debt to total assets.
Deposit ratio	DRit	Ratio of total deposits to total assets.
Loan ratio	LRit	Ratio of total advances to total assets.
Age	AGEit	Total number of years of a firm since its incorporation.
Size	SIZEit	Natural logarithm of total assets.
Growth opportunities	GROWit	Annual change in the book value of total assets.
Dummy year 2007^a	DYEAR_2007	Dummy variable for year 2007.
Dummy year 2008^a	DYEAR_2008	Dummy variable for year 2008.
Dummy year 2020^a	DYEAR_2020	Dummy variable for year 2020.

* STATA software creates dummy variable for years automatically.

Source: Authors’ Own Estimations.

Table 2. Descriptive statistics of continuous variables.

Variable	Unit	Obs.	Mean	SD	Min.	Max.
ROAit	(%)	585	0.1062	0.1498	0.0214	0.4127
ROEit	(%)	585	0.2004	0.2103	0.1029	0.5982
TQit	(%)	585	0.5370	0.4369	0.26	1.28
FSit	(%)	585	0.1028	0.0809	0.02	0.12
CARit	(%)	585	0.1372	0.1634	0.12	0.85
TDit	(%)	585	0.8436	0.8532	0.5187	0.9758
LTDit	(%)	585	0.6812	0.5412	0.4863	0.7452
DRit	(%)	585	0.6142	0.6328	0.45	0.95
LRit	(%)	585	0.4255	0.3298	0.2547	0.7238
AGEit	(Years)	585	16.32	6.20	5.40	35.00
SIZEit	(USD’000)	585	3.2356	1.3658	1.9854	3.9586
GROWit	(Times)	585	0.0954	0.0843	0.0064	0.1269

Source: Authors’ Own Estimations.

Table 3. Correlation of variables.

	ROAit	ROEit	TQit	CARit	TDit	LTDit	DRit	LRit	AGEit	SIZEit	GROWit
ROAit	1
ROEit	0.23**	1
TQit	0.12***	0.18***	1
CARit	0.14***	0.26***	0.24**	1
TDit	−0.25**	−0.19**	−0.11***	−0.16***	1
LTDit	−0.14**	−0.27***	−0.15***	−0.12***	−0.24***	1
DRit	0.25***	0.15***	0.16***	0.17***	0.15***	0.14***	1
LRit	0.11***	0.10***	0.15***	0.28***	0.22***	0.21***	0.16***	1
AGEit	0.21***	0.14***	0.16***	0.12***	0.17***	0.15***	0.22**	0.19**	1
SIZEit	0.16**	0.11*	0.21**	0.13***	0.25***	0.24***	0.21***	0.12***	0.18***	1
GROWit	0.24***	0.21***	0.22***	0.18***	0.13***	0.15***	0.11***	0.20***	0.11**	0.14***	1

Significant at ^*10%, ^**5%, and ^***1% levels.

Source: Authors’ Own Estimations.

Table 4. The impact of sustainable banking regulations on bank-specific characteristics during 2006–2020.

	ROAit	ROEit	TQit
L1	0.8426	0.3652	0.2141
	(0.89)***	(1.21)***	(0.12)***
CARit	1.0287	2.0384	1.9851
	(1.32)**	(1.63)***	(1.28)***
TDit	−2.0315	−1.8745	−0.6745
	(−1.29)**	(−0.69)***	(−0.58)***
LTDit	−1.2584	−1.9856	−1.2340
	(−0.63)***	(−1.26)**	(−0.76)**
DRit	0.5842	0.2369	0.1963
	(0.39)*	(0.32)**	(0.51)**
LRit	0.2174	0.3265	0.1485
	(0.21)*	(1.21)*	(0.93)*
AGEit	0.8521	0.3298	0.4125
	(1.30)***	(1.28)***	(1.98)***
SIZEit	0.3201	0.9852	0.9742
	(0.63)***	(0.25)***	(1.27)***
GROWit	2.0351	1.5214	1.0638
	(1.92)	(1.30)	(0.52)
DYEAR_2007	1.2846	1.9846	1.6596
	(0.29)***	(0.87)***	(0.32)***
DYEAR_2008	0.2816	0.8554	0.7468
	(1.98)***	(0.28)***	(1.26)***
DYEAR_2020	1.2032	1.2565	0.2358
	(0.39)***	(0.84)***	(1.23)***
C	0.1716	0.1475	0.3985
	(1.21)**	(0.29)**	(0.32)**
Sargan Test	0.2541	0.1154	0.1532
AR(2)	0.5498	0.3251	0.2174
Bank-Year Observations	585	585	585
N	15	15	15

Source: Authors’ Own Estimations.

Table 5. The moderating role of financial stability on the relationship between sustainable banking regulations and bank-specific characteristics during 2006–2020.

	ROAit	ROEit	TQit
L1	0.2188	0.8452	0.1432
	(0.11)***	(0.28)***	(0.26)***
FSit	−1.2871	−1.9531	−0.1243
	(−0.38)***	(−0.87)**	(−0.30)***
CARit	0.1742	0.1874	0.7213
	(0.14)	(0.84)	(0.27)
FSit *CARit	−0.9852	−0.2170	−0.9531
	(−0.26)***	(−0.29)***	(−1.23)***
TDit	2.0245	0.5457	0.2684
	(2.31)	(1.39)	(0.59)
FSit *TDit	−2.0872	−6.4465	−0.1472
	(−1.27)***	(−2.31)***	(−0.51)***
LTDit	2.0471	1.9866	1.2314
	(0.95)	(0.15)	(0.36)
FSit *LTDit	−1.9875	−2.4778	−2.1030
	(−2.01)**	(−2.38)**	(−0.89)**
DRit	2.1789	6.0475	3.0785
	(1.09)	(1.06)	(2.69)
FSit *DRit	−2.9756	−1.0286	−0.2141
	(−2.03)**	(−1.32)***	(−0.38)**
LRit	1.0328	0.1185	0.5888
	(0.32)	(0.95)	(0.22)
FSit *LRit	−1.0387	−1.5782	−1.7884
	(−0.39)**	(−0.28)***	(0.13)***
C	1.2584	1.4789	1.0698
	(1.21)***	(2.39)***	(2.07)***
Sargan Test	0.1521	0.1746	0.1321
AR(2)	0.5243	0.5894	0.5101
Bank-Year Observations	585	585	585
N	15	15	15

Source: Authors’ Own Estimations.

Table 6. Year-wise averages of dependent and independent variables.

	ROAit	ROEit	TQit	CARit	TDit	LTDit	DRit	LRit
2006	0.066	0.128	0.516	0.117	0.781	0.652	0.623	0.328
2007	0.074	0.134	0.501	0.129	0.769	0.698	0.520	0.301
2008	0.052	0.124	0.491	0.135	0.723	0.701	0.491	0.336
2009	0.092	0.136	0.503	0.152	0.786	0.688	0.635	0.369
2010	0.102	0.153	0.506	0.112	0.853	0.745	0.526	0.395
2011	0.124	0.186	0.521	0.158	0.862	0.634	0.631	0.381
2012	0.106	0.192	0.560	0.120	0.890	0.620	0.627	0.413
2013	0.104	0.203	0.586	0.118	0.847	0.687	0.751	0.418
2014	0.120	0.215	0.632	0.107	0.821	0.553	0.712	0.428
2015	0.126	0.239	0.598	0.116	0.910	0.740	0.681	0.492
2016	0.118	0.256	0.541	0.153	0.856	0.682	0.592	0.528
2017	0.130	0.263	0.584	0.127	0.847	0.657	0.583	0.532
2018	0.121	0.239	0.523	0.169	0.914	0.723	0.528	0.571
2019	0.129	0.251	0.510	0.159	0.905	0.736	0.623	0.481
2020	0.130	0.287	0.483	0.187	0.890	0.702	0.690	0.410
Obs.	585	585	585	585	585	585	585	585
N	15	15	15	15	15	15	15	15

Source: Authors’ Own Estimations.

Data availability statement

Data will be available on the corresponding author’s request due to privacy and ethical concerns.