BANK PROFITABILITY AND ECONOMIC GROWTH: EVIDENCE FROM TUNISIA

Mohamed Aymen Ben Moussa, Zohra Hdidar

Abstract


Bank profitability and economic growth are important for financial development of each country. It is interesting to understand the characteristics of these two variables and the relationship between them. In this article, we investigate the effect of economic growth on bank profitability using a sample of 18 banks in Tunisia over the period (2000 - 2017). We employ ROA (return on assets), ROE (return on equity) as indicators of bank profitability like dependent variable, the other bank specific variation, economic growth as independent variable. We use panel method for regression of 2moels. We found that economic growth has a positive and significant effect on bank profitability.


JEL: C33, G20, G21, E32

 

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Keywords


bank profitability, economic growth, return on assets, return on equity, panel

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