Table III. Study variables* Variable...

Table III.

Study variables*

Variable	Description	Expected sign
Dependent variables
ROA	Bank’s before-tax profits divided by total assets
NIM	Net interest income divided by total assets
	Independent variables
Bank characteristics
EQ/TA_t−1	Equity divided by lagged total assets	+
LOTA	Loans divided by total assets	–
DSTA	Consumer and short-term funds divided by total assets	–
OHTA	Overhead divided by total assets	–
OOI	Other operating income divided by total assets	+
FRGN	Dummy, equal 1 if a bank has at least 50% foreign ownership otherwise 0	–
Macroeconomic
GDPPC	GDP per capita (constant 2005 [USD] prices)	+
Growth rate	GDP per capita (constant 2005 [USD] prices) growth rate	+
Oil shock
OIL	Annual change on oil prices (constant 2005 [USD] prices)	+
Taxation
TAX	Tax divided by before tax profit	+
RES	Reserve of the banking system over deposit of the banking system multiplied by customer and short-term funding over assets for each bank	+
Deposit insurance
INR	Dummy, equal one if the country has explicit deposit insurance and zero otherwise	–
Financial structure
MACP	Market capitalization over GDP	–
BNK	Bank’s assets over GDP	+
Assets	Bank’s total assets (constant 2005 [USD] prices)	+
C3	The assets of the largest three banks divided by the assets of the banking system	+

Variable	Description	Expectedsign
Dependent variables
ROA	Bank’s before-tax profits divided by total assets
NIM	Net interest income divided by total assets
	Independent variables
Bank characteristics
EQ/TA_t−1	Equity divided by lagged total assets	+
LOTA	Loans divided by total assets	–
DSTA	Consumer and short-term funds divided by total assets	–
OHTA	Overhead divided by total assets	–
OOI	Other operating income divided by total assets	+
FRGN	Dummy, equal 1 if a bank has at least 50% foreign ownership otherwise 0	–
Macroeconomic
GDPPC	GDP per capita (constant 2005 [USD] prices)	+
Growth rate	GDP per capita (constant 2005 [USD] prices) growth rate	+
Oil shock
OIL	Annual change on oil prices (constant 2005 [USD] prices)	+
Taxation
TAX	Tax divided by before tax profit	+
RES	Reserve of the banking system over deposit of the banking system multiplied by customer and short-term funding over assets for each bank	+
Deposit insurance
INR	Dummy, equal one if the country has explicit deposit insurance and zero otherwise	–
Financial structure
MACP	Market capitalization over GDP	–
BNK	Bank’s assets over GDP	+
Assets	Bank’s total assets (constant 2005 [USD] prices)	+
C3	The assets of the largest three banks divided by the assets of the banking system	+

Note:

*All independent variables interacted with GDP per capita (constant 2005 [USD] prices) except for inflation

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