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Determinants of Net Interest Margin: An Analytical Study on the Commercial Banks Operating in Jordan (2005-2015)

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  • Rami Obeid

    (Department of Business Economics, The University of Jordan, Amman, Jordan,)

  • Mohammad Adeinat

    (Department of Business Economics, The University of Jordan, Amman, Jordan)

Abstract

This study aimed at measuring the factors that affect the net interest margin (NIM) in the commercial banks operating in Jordan using the data on annual frequency for 19 commercial banks covering the study period (2005-2015) (panel data). Econometric models were built and analyzed using testing both fixed effects model and random effects model. The Hausman test was used to get the optimal model. The results revealed that external factors had bigger effect on the NIM than the internal factors.

Suggested Citation

  • Rami Obeid & Mohammad Adeinat, 2017. "Determinants of Net Interest Margin: An Analytical Study on the Commercial Banks Operating in Jordan (2005-2015)," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 515-525.
    • Handle: RePEc:eco:journ1:2017-04-61
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    References listed on IDEAS

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    9. Pamuji Gesang Raharjo & Dedi Budiman Hakim & Adler Hayman Manurung & Tubagus N.A. Maulana, 2014. "The Determinant of Commercial Banks' Interest Margin in Indonesia: An Analysis of Fixed Effect Panel Regression," International Journal of Economics and Financial Issues, Econjournals, vol. 4(2), pages 295-308.
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    Cited by:

    1. Rami Obeid, 2023. "Factors Affecting Return on Assets (ROA) in the Banking Sector of Selected Arab Countries: Is There a Role for Financial Inclusion and Technology Indicators?," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 15(9), pages 1-1, September.
    2. Rami Obeid, 2023. "The Impact of Macroprudential and Monetary Policies Instruments on the Private Credit Growth in the Arab Banking Sector," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 10-14, September.
    3. Rami Obeid & Bassam Awad, 2018. "Interaction of Monetary and Macro-prudential Policies: The Case of Jordan- Credit Gap as an Example," Asian Journal of Economics and Empirical Research, Asian Online Journal Publishing Group, vol. 5(1), pages 99-111.
    4. Rami Obeid, 2023. "Determinants of Capital Adequacy Ratio in the Banking Sector: Evidence from the Arab Region," International Journal of Business and Management, Canadian Center of Science and Education, vol. 18(5), pages 1-63, August.
    5. Zaenal ABIDIN & Taufiq AKBAR & Ahmad Halilintar SUDJA’I, 2022. "Gender Diversity In Top Management Teams And Its Effects On National Commercial Banks' Performance," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 21(2), pages 3-12.
    6. Rami Obeid, 2023. "The Impact of Market Power, Credit Risk, and Economic Environment on the Stability of the Arab Banking Sector," International Business Research, Canadian Center of Science and Education, vol. 16(10), pages 1-1, October.

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    More about this item

    Keywords

    Net Interest Margin; Commercial Banks; Monetary Policy Instruments; Panel Data;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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