Table 4 Estimation of the system with...

Table 4

Estimation of the system with ROA as profitability measure

	Islamic banks	Conventional banks
Independent variables Dependent variable
PERF (ROA)
Lag PERF	0.383** (0.028)	0.120*** (0.000)
DIV	0.014*** (0.006)	0.741*** (0.000)
CAPSTR	0.025*** (0.000)	0.497*** (0.000)
DIV*CAPSTR	0.009*** (0.000)	0.174*** (0.000)
Size	0.165*** (0.000)	0.404*** (0.000)
CR	−0.052*** (0.000)	−0.130*** (0.000)
LR	−1.88*** (0.000)	−1.333*** (0.000)
CE	−0.004 (0.181)	−0.090*** (0.000)
ICR	0.003*** (0.001)	0.0005*** (0.000)
Covid-19	−1.575** (0.015)	−0.052*** (0.000)
INF	−0.108 (0.346)	−1.782*** (0.000)
GDP	0.046*** (0.001)	0.044*** (0.000)
Const	−0.893*** (0.000)	0.066 (0.562)
AR(2)	0.02	−0.33
AR(2)	(0.787)	(0.744)
Hansen test	10.77	50.21
Hansen test	(0.682)	(0.241)

	Islamic banks	Conventional banks
Independent variablesDependent variable
PERF (ROA)
Lag PERF	0.383** (0.028)	0.120*** (0.000)
DIV	0.014*** (0.006)	0.741*** (0.000)
CAPSTR	0.025*** (0.000)	0.497*** (0.000)
DIV*CAPSTR	0.009*** (0.000)	0.174*** (0.000)
Size	0.165*** (0.000)	0.404*** (0.000)
CR	−0.052*** (0.000)	−0.130*** (0.000)
LR	−1.88*** (0.000)	−1.333*** (0.000)
CE	−0.004 (0.181)	−0.090*** (0.000)
ICR	0.003*** (0.001)	0.0005*** (0.000)
Covid-19	−1.575** (0.015)	−0.052*** (0.000)
INF	−0.108 (0.346)	−1.782*** (0.000)
GDP	0.046*** (0.001)	0.044*** (0.000)
Const	−0.893*** (0.000)	0.066 (0.562)
AR(2)	0.02	−0.33
AR(2)	(0.787)	(0.744)
Hansen test	10.77	50.21
Hansen test	(0.682)	(0.241)

Note(s): Hansen-test refers to the over-identification test for the restrictions in GMM estimation. AR (2) test is the test of the second-order autocorrelation in first differences. () indicate p-value. ***, **, * denote 1%, 5% and 10% significance levels, respectively

Source(s): Table created by authors

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