Table 3.
The impact of macroeconomic uncertainty (MU) on bank stability (ZSCORE).
| Variables | ZSCORE is the dependent variable |
|||||||
|---|---|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | |
| Lag.SIZE | 0.2405** | 0.2320** | 0.2375** | 0.3331*** | 0.3329*** | 0.4035*** | 0.3771*** | 0.2651** |
| (0.1024) | (0.1031) | (0.1020) | (0.1177) | (0.1148) | (0.1078) | (0.1057) | (0.1021) | |
| Lag.LTA | 0.6620*** | 0.6958*** | 0.6226*** | 0.6863*** | 0.6961*** | 0.6393*** | 0.6157** | 0.5932** |
| (0.2342) | (0.2372) | (0.2369) | (0.2389) | (0.2405) | (0.2403) | (0.2399) | (0.2363) | |
| Lag.LLP | -0.0497*** | -0.0489*** | -0.0532*** | -0.0477*** | -0.0462*** | -0.0509*** | -0.0463*** | -0.0542*** |
| (0.0119) | (0.0120) | (0.0121) | (0.0119) | (0.0118) | (0.0123) | (0.0119) | (0.0120) | |
| Lag.NPL | -1.1560** | -1.1245** | -1.0602** | -1.0637** | -1.0660** | -1.0061** | -0.9677** | -0.9915** |
| (0.4646) | (0.4649) | (0.4516) | (0.4439) | (0.4461) | (0.4268) | (0.4295) | (0.4374) | |
| ZSCORE(Country) | 0.1483 | 0.2732 | 0.1027 | 0.0447 | 0.0876 | -0.0269 | 0.2482 | |
| (0.1817) | (0.1782) | (0.1780) | (0.1795) | (0.1794) | (0.1805) | (0.1791) | ||
| CONCEN(Country) | -0.2425*** | -0.2145*** | -0.2133*** | -0.2204*** | -0.1701** | -0.1764*** | -0.1965*** | |
| (0.0661) | (0.0681) | (0.0666) | (0.0657) | (0.0654) | (0.0650) | (0.0678) | ||
| LnGPR | 0.3163** | |||||||
| (0.1309) | ||||||||
| LnEPU | -0.1105** | |||||||
| (0.0549) | ||||||||
| LnCPU | -0.1056** | |||||||
| (0.0521) | ||||||||
| WPU | -0.0162*** | |||||||
| (0.0028) | ||||||||
| GSCP | -0.1102*** | |||||||
| (0.0240) | ||||||||
| LnMPU | -0.1235*** | |||||||
| (0.0336) | ||||||||
| Constant | -1.1258* | -1.0079 | -2.4585*** | -1.1266* | -1.1797* | -2.1245*** | -1.9488*** | -0.6728 |
| (0.6498) | (0.6585) | (0.9425) | (0.6569) | (0.6595) | (0.6878) | (0.6774) | (0.6419) | |
| Obs. | 1,570 | 1,570 | 1,570 | 1,570 | 1,570 | 1,570 | 1,570 | 1,570 |
| R squared | 0.0506 | 0.0569 | 0.0625 | 0.0620 | 0.0619 | 0.0892 | 0.0775 | 0.0693 |
| Banks | 157 | 157 | 157 | 157 | 157 | 157 | 157 | 157 |
| BFE | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Table 3 reports estimated results from the baseline model (1). The dependent variable of ZSCORE is bank stability. Column (1) shows the impact of bank characteristics on bank stability. Column (2) displays the effect of bank characteristics and banking system characteristics on bank stability. Columns (3-8) report the influences of bank characteristics, banking system characteristics, and macroeconomic uncertainty (MU) variables on bank stability. MU variables include LnGPR, LnEPU, LnCPU, WPU, GSPC, and LnMPU, they are key explanatory variables. Robust standard errors are in parentheses. ∗∗∗denotes significance at a 1% level. ∗∗denotes significance at a 5%. ∗denotes significance at a 10% level.