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Investigating the Effect of Financial and Non-Financial Variables on the Economic Value Added of Iranian Banks
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Azam Ahmadyan1   , Rasool Khansari *1 |
| 1- Monetary and Banking Research Institute |
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Abstract: (762 Views) |
Economic value added is a new approach of evaluating the performance of banks that does not have accounting problems in calculating profit and loss and can predict the future state of the bank in terms of health. In this paper, the effect of various financial and non-financial factors on the economic value added of banks, in the period of 1385-1397, has been investigated by using panel data approach. Empirical literature has been used to identify the effective factors in the economic value added of banks.
The results have shown the distinct behavior of economic value added in different business cycles. In addition, improving the risk management of banks and improving the health of banks has a positive effect on the economic value added of the Iranain banks. Examining the combination of asset and debt portfolio of banks shows that the approach of banks in increasing income generating assets can help to improve the economic value added of banks. The approach of financial ratios in evaluating the performance of the Iran's banking system, while having accounting problems, cannot properly express the state of a bank in terms of stability and health; Therefore, it is recommended that, in addition to using the approach of financial ratios, the measurement of the economic value added of banks is also used as a new financial approach to evaluate the performance of banks and the most important effective factors are also evaluated. |
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Full-Text [PDF 836 kb]
(487 Downloads)
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Type of Study: Empirical Study |
Subject:
Financial Institutions and Services (G2)
Received: 2020/12/27 | Accepted: 2021/05/17 | Published: 2022/08/20
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