Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah

The present study examines the determinants of loan loss provisions with the presence of earnings management and capital management by commercial banks in the emerging and developed markets during the period of 2004 to 2012. Besides the main objective, there are external factors as well as the inter...

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Main Author:	Abdullah, Hasni
Format:	Thesis
Language:	English
Published:	2016
Online Access:	http://ir.uitm.edu.my/id/eprint/17773/ http://ir.uitm.edu.my/id/eprint/17773/2/TP_HASNI%20ABDULLAH%20BM%2016_5.pdf

id	uitm-17773
recordtype	eprints
spelling	uitm-177732019-03-05T06:04:17Z http://ir.uitm.edu.my/id/eprint/17773/ Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah Abdullah, Hasni The present study examines the determinants of loan loss provisions with the presence of earnings management and capital management by commercial banks in the emerging and developed markets during the period of 2004 to 2012. Besides the main objective, there are external factors as well as the internal factors investigated in determining the loan loss provisions. This study focuses on the banking sectors that specify the commercial banks for the period of 2004 to 2012 in selected emerging and developed markets. In order to achieve the objectives of this study, Malaysia and Thailand are chosen to represent the emerging markets, while the developed markets are represented by Hong Kong and Japan. The empirical findings based on Pooled Ordinary Least Square (Pooled OLS) with Newey-West Standard Error for emerging markets and Fixed Effects (FE) with heteroscedasticity and autocorrelation for developed markets recommend that earnings management, gross domestic product and certain bank internal factors have a statistically significant impact on loan loss provisions. This study found that the proxy of earnings management, earnings before tax and provisions is positively related to loan loss provisions in both economies. Surprisingly, the variable of capital management is found to be insignificant in emerging market economies and positively associated with LLP in developed markets. Based on the empirical findings of GDP implying that during the period of study, the economic expansion does influence the decision of loan loss provision by following the normal pattern of business cycle for both markets and contributes to the procyclicality behaviour of loan loss provisions. With respect to the effect of bank specific factors on the loan loss provisions of emerging and developed markets, it clearly indicates from the overall perspective of the results, that the obvious factors that have really contributed to loan loss provisioning practice of both markets are only the non-performing loan and the return on assets. Meanwhile, the robustness check using Generalized Method of Moments (GMM) has basically generated the same results as Fixed Effects with heteroscedasticity and autocorrelation for developed markets. 2016 Thesis NonPeerReviewed text en http://ir.uitm.edu.my/id/eprint/17773/2/TP_HASNI%20ABDULLAH%20BM%2016_5.pdf Abdullah, Hasni (2016) Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah. PhD thesis, Universiti Teknologi MARA.
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Teknologi MARA
building	UiTM Institutional Repository
collection	Online Access
language	English
description	The present study examines the determinants of loan loss provisions with the presence of earnings management and capital management by commercial banks in the emerging and developed markets during the period of 2004 to 2012. Besides the main objective, there are external factors as well as the internal factors investigated in determining the loan loss provisions. This study focuses on the banking sectors that specify the commercial banks for the period of 2004 to 2012 in selected emerging and developed markets. In order to achieve the objectives of this study, Malaysia and Thailand are chosen to represent the emerging markets, while the developed markets are represented by Hong Kong and Japan. The empirical findings based on Pooled Ordinary Least Square (Pooled OLS) with Newey-West Standard Error for emerging markets and Fixed Effects (FE) with heteroscedasticity and autocorrelation for developed markets recommend that earnings management, gross domestic product and certain bank internal factors have a statistically significant impact on loan loss provisions. This study found that the proxy of earnings management, earnings before tax and provisions is positively related to loan loss provisions in both economies. Surprisingly, the variable of capital management is found to be insignificant in emerging market economies and positively associated with LLP in developed markets. Based on the empirical findings of GDP implying that during the period of study, the economic expansion does influence the decision of loan loss provision by following the normal pattern of business cycle for both markets and contributes to the procyclicality behaviour of loan loss provisions. With respect to the effect of bank specific factors on the loan loss provisions of emerging and developed markets, it clearly indicates from the overall perspective of the results, that the obvious factors that have really contributed to loan loss provisioning practice of both markets are only the non-performing loan and the return on assets. Meanwhile, the robustness check using Generalized Method of Moments (GMM) has basically generated the same results as Fixed Effects with heteroscedasticity and autocorrelation for developed markets.
format	Thesis
author	Abdullah, Hasni
spellingShingle	Abdullah, Hasni Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
author_facet	Abdullah, Hasni
author_sort	Abdullah, Hasni
title	Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
title_short	Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
title_full	Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
title_fullStr	Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
title_full_unstemmed	Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah
title_sort	empirical investigation on loan loss provisions: a cross country analysis / hasni abdullah
publishDate	2016
url	http://ir.uitm.edu.my/id/eprint/17773/ http://ir.uitm.edu.my/id/eprint/17773/2/TP_HASNI%20ABDULLAH%20BM%2016_5.pdf
first_indexed	2023-09-18T22:59:02Z
last_indexed	2023-09-18T22:59:02Z
_version_	1777418048950501376

Empirical investigation on loan loss provisions: a cross country analysis / Hasni Abdullah

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