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- Title
Profitability, Capital and Credit Risk in ecuadorians banks.
- Authors
Lapo-Maza, María del Carmen; Tello-Sánchez, Michelle Gioconda; Mosquera-Camacás, Sandra Carolina
- Abstract
Aim: To determine the influence of the capital structure and credit risk on the profitability of Ecuadorian private banks through path modeling. Method: 504 observations from seven Ecuadorian banks between 2012-2017 were analyzed. A PLS-SEM path model was estimated. Results: The capital structure in Ecuadorian banks was significantly influenced by credit risk, and has no significant impact on profitability. Credit risk had a significant negative effect on profitability. Limitations: The macroeconomic and institutional environment or potential effects derived from the size or other characteristics of the bank were not incorporated. Conclusions: The findings encourage bank leaders to improve risk management practices and to make capital structure decisions that increase their profitability. Originality: PLS-SEM has begun to being used in finance and banking, this study shows its applicability and the advantages of its use.
- Subjects
CREDIT risk; CAPITAL structure; PROFITABILITY; ECUADORIANS; INSTITUTIONAL environment; BANK profits; PRIVATE banks
- Publication
Investigación Administrativa, 2021, Issue 127, p18
- ISSN
1870-6614
- Publication type
Article