Table 9 Panel regressions of bank efficiency (CIR) by periods (full sample, precrisis and crisis, and postcrisis)
Variable
Full sample period (2005–2015)
Pre-crisis and during crisis period
(2005–2009)
Post-crisis period (2010–2015)
Model 1
Model 2
Model 3
Model 13 Model
14
Model 15 Model 16 Model 17 Model 18
Constant
0.1623
0.148
0.2097
0.499
1.5833
0.000***
0.2735
0.131
0.7279
0.260
1.1459
0.181
0.0417
0.762
−0.0851
0.783
1.7622
0.000***
Deposits/Assets
0.1357
0.117
−0.0381
0.828
0.1084
0.537
0.2686
0.112
0.2083
0.501
0.7263
0.004***
0.1887
0.047**
0.1816
0.369
0.1844
0.374
Loans/Assets
0.1455
0.082*
0.2452
0.200
−0.7566
0.027**
0.2143
0.122
0.0853
0.852
−0.3803
0.662
0.1987
0.064*
0.3097
0.103
−1.5839
0.000***
ROA
−1.4154
0.000***
−3.2222
0.000***
−4.1264
0.000***
−1.2229
0.034**
−4.8534
0.010***
−12.4012
0.000***
0.0949
0.889
−1.8117
0.060*
−0.6537
0.537
Other Earning Assets
0.0658
0.286
−0.0472
0.683
−0.3050
0.184
0.0963
0.350
0.0649
0.752
0.1199
0.791
0.0933
0.212
0.1897
0.189
−0.6666
0.002***
Income Diversity
0.0962
0.198
0.0832
0.379
−0.3157
0.007***
0.1087
0.429
0.5143
0.077*
−0.1114
0.576
0.2037
0.020**
0.1010
0.245
−0.4302
0.001***
Non-Interest Income
−0.1228
0.181
−0.0134
0.916
0.3741
0.019**
−0.1837
0.204
−0.4938
0.200
0.2591
0.335
0.1061
0.381
0.2101
0.088*
0.6993
0.000***
Log(Size)
0.0029
0.571
0.0030
0.764
−0.0359
0.002***
−0.0273
0.038**
−0.0383
0.104
−0.0597
0.007***
0.0020
0.712
−0.0034
0.752
−0.0260
0.027**
Tier 1 Ratio
−0.0988
0.736
0.5573
0.093*
−0.6118
0.294
0.2316
0.642
0.8585
0.022**
1.3350
0.001***
Tangible Equity
0.0530
0.855
−0.5406
0.083*
0.3967
0.507
0.1872
0.701
−0.6171
0.070*
−1.1600
0.001***
Liquid Assets
0.0547
0.757
−0.7325
0.005***
−0.0437
0.914
−0.7465
0.315
0.2006
0.288
−1.0025
0.000***
Funding Fragility
−0.1151
0.326
0.2625
0.101
−0.0527
0.772
0.3425
0.052*
−0.3913
0.014**
0.1607
0.544
Equity Volatility
−0.1195
0.006***
−0.0856
0.098*
−0.0424
0.415
Log(Z)
−0.0472
0.004***
−0.0261
0.245
−0.0009
0.973
LISTED_D
−0.0293
0.376
0.0244
0.606
−0.0217
0.668
0.0101
0.840
−0.0941
0.365
−0.0524
0.523
−0.1060
0.013**
−0.0009
0.984
−0.0252
0.594
ISLAMIC_D
0.0835
0.000***
0.1062
0.000***
0.0693
0.046**
0.0393
0.223
−0.0839
0.245
−0.0210
0.725
0.1090
0.000***
0.1206
0.000***
0.0635
0.053*
CRISIS_D
−0.0185
0.364
−0.0458
0.033**
0.0276
0.231
–
–
–
–
–
–
Number of Observations 253
180
117
99
66
37
154
114
80
Number of Parameters
11
15
17
11
15
17
10
15
16
F
9.22
6.13
8.19
3.88
2.36
14.14
8.93
9.03
8.00
Prob > F
0.0000*** 0.0000*** 0.0000*** 0.0000*** 0.0130** 0.0000*** 0.0000*** 0.0000*** 0.0000***
R-squared
0.2759
0.3421
0.5672
0.3059
0.3934
0.9188
0.3582
0.5400
0.6522
Adj R-squared
0.2459
0.2863
0.4979
0.2270
0.2269
0.8538
0.3181
0.4802
0.5707
Root MSE
0.1165
0.1052
0.7993
0.1265
0.1161
0.0572
0.1000
0.0829
0.0604
Breusch–Pagan test of
independence: chi2(6)
82.21
57.65
60.64
37.38
36.90
32.63
35.92
36.90
24.58
*Significance Level (p-value): p***
0.01, p**
0.05, p*
0.10
Note The sample includes 352 observations of 32 banks in the UAE over 11 years. The sample of conventional banks includes 242 observations,
and the sample of Islamic banks includes 110 observations. As the dependent variable to measure the bank’s level of cost efficiency, we use Cost to
Income Ratio (CIR). The independent variables used in this analysis are bank-level characteristics, capital adequacy ratios, risk and ownership
structure measures. The regressions analysis tests the significance of the relationships between the dependent and explanatory variables, the control
variables, and the dummy variables for the whole sample, as well as for the samples of Islamic banks and conventional banks. We run the analysis
separately for the full sample period (2005–2015), precrisis and crisis period (2005–2009), and the postcrisis period (2010–2015)
80
F. Mrad and M. Mateev
Variable
Full sample period (2005–2015)
Pre-crisis and during crisis period
(2005–2009)
Post-crisis period (2010–2015)
Model 1
Model 2
Model 3
Model 13 Model
14
Model 15 Model 16 Model 17 Model 18
Constant
0.1623
0.148
0.2097
0.499
1.5833
0.000***
0.2735
0.131
0.7279
0.260
1.1459
0.181
0.0417
0.762
−0.0851
0.783
1.7622
0.000***
Deposits/Assets
0.1357
0.117
−0.0381
0.828
0.1084
0.537
0.2686
0.112
0.2083
0.501
0.7263
0.004***
0.1887
0.047**
0.1816
0.369
0.1844
0.374
Loans/Assets
0.1455
0.082*
0.2452
0.200
−0.7566
0.027**
0.2143
0.122
0.0853
0.852
−0.3803
0.662
0.1987
0.064*
0.3097
0.103
−1.5839
0.000***
ROA
−1.4154
0.000***
−3.2222
0.000***
−4.1264
0.000***
−1.2229
0.034**
−4.8534
0.010***
−12.4012
0.000***
0.0949
0.889
−1.8117
0.060*
−0.6537
0.537
Other Earning Assets
0.0658
0.286
−0.0472
0.683
−0.3050
0.184
0.0963
0.350
0.0649
0.752
0.1199
0.791
0.0933
0.212
0.1897
0.189
−0.6666
0.002***
Income Diversity
0.0962
0.198
0.0832
0.379
−0.3157
0.007***
0.1087
0.429
0.5143
0.077*
−0.1114
0.576
0.2037
0.020**
0.1010
0.245
−0.4302
0.001***
Non-Interest Income
−0.1228
0.181
−0.0134
0.916
0.3741
0.019**
−0.1837
0.204
−0.4938
0.200
0.2591
0.335
0.1061
0.381
0.2101
0.088*
0.6993
0.000***
Log(Size)
0.0029
0.571
0.0030
0.764
−0.0359
0.002***
−0.0273
0.038**
−0.0383
0.104
−0.0597
0.007***
0.0020
0.712
−0.0034
0.752
−0.0260
0.027**
Tier 1 Ratio
−0.0988
0.736
0.5573
0.093*
−0.6118
0.294
0.2316
0.642
0.8585
0.022**
1.3350
0.001***
Tangible Equity
0.0530
0.855
−0.5406
0.083*
0.3967
0.507
0.1872
0.701
−0.6171
0.070*
−1.1600
0.001***
Liquid Assets
0.0547
0.757
−0.7325
0.005***
−0.0437
0.914
−0.7465
0.315
0.2006
0.288
−1.0025
0.000***
Funding Fragility
−0.1151
0.326
0.2625
0.101
−0.0527
0.772
0.3425
0.052*
−0.3913
0.014**
0.1607
0.544
Equity Volatility
−0.1195
0.006***
−0.0856
0.098*
−0.0424
0.415
Log(Z)
−0.0472
0.004***
−0.0261
0.245
−0.0009
0.973
LISTED_D
−0.0293
0.376
0.0244
0.606
−0.0217
0.668
0.0101
0.840
−0.0941
0.365
−0.0524
0.523
−0.1060
0.013**
−0.0009
0.984
−0.0252
0.594
ISLAMIC_D
0.0835
0.000***
0.1062
0.000***
0.0693
0.046**
0.0393
0.223
−0.0839
0.245
−0.0210
0.725
0.1090
0.000***
0.1206
0.000***
0.0635
0.053*
CRISIS_D
−0.0185
0.364
−0.0458
0.033**
0.0276
0.231
–
–
–
–
–
–
Number of Observations 253
180
117
99
66
37
154
114
80
Number of Parameters
11
15
17
11
15
17
10
15
16
F
9.22
6.13
8.19
3.88
2.36
14.14
8.93
9.03
8.00
Prob > F
0.0000*** 0.0000*** 0.0000*** 0.0000*** 0.0130** 0.0000*** 0.0000*** 0.0000*** 0.0000***
R-squared
0.2759
0.3421
0.5672
0.3059
0.3934
0.9188
0.3582
0.5400
0.6522
Adj R-squared
0.2459
0.2863
0.4979
0.2270
0.2269
0.8538
0.3181
0.4802
0.5707
Root MSE
0.1165
0.1052
0.7993
0.1265
0.1161
0.0572
0.1000
0.0829
0.0604
Breusch–Pagan test of
independence: chi2(6)
82.21
57.65
60.64
37.38
36.90
32.63
35.92
36.90
24.58
*Significance Level (p-value): p***
0.01, p**
0.05, p*
0.10
Note The sample includes 352 observations of 32 banks in the UAE over 11 years. The sample of conventional banks includes 242 observations,
and the sample of Islamic banks includes 110 observations. As the dependent variable to measure the bank’s level of cost efficiency, we use Cost to
Income Ratio (CIR). The independent variables used in this analysis are bank-level characteristics, capital adequacy ratios, risk and ownership
structure measures. The regressions analysis tests the significance of the relationships between the dependent and explanatory variables, the control
variables, and the dummy variables for the whole sample, as well as for the samples of Islamic banks and conventional banks. We run the analysis
separately for the full sample period (2005–2015), precrisis and crisis period (2005–2009), and the postcrisis period (2010–2015)
80
F. Mrad and M. Mateev