The Implication of CEO Education, Macroeconomic Factors and Banking Performance in the Context of Pakistan and China

Muhammad Kashif Majeed, Ji Cheng Jun, Sajjad Ahmad Baig, Muhammad Mohsin, Sara Shafaqat, Muhammad Zia-ur-Rehman*

Abstract
- This research study's main objective is to find theimpact of CEO education, bank size and macroeconomic variables onthe profitability (ROA) of Pakistani and Chinese listed banks. The bank is the major source of debt financing for business and non-business enterprises. Therefore, the stability of the banking industry is essential forthe financial system. Economic theory uncovered the control of the large and established bank in the nativemarketplace. It operated in a different atmosphere at a higher lending rate, but larger institutions give low rates on deposit as they are thought safer. Therefore, larger banks may benefit fromelevatedyield, and experimental results also conclusive. The research paper identified that the bank sizeaffects Pakistani and Chinese banks' profitability by using longitudinal data from 2009 to 2018. We employed the Ordinary Least Square (OLS) technique with E-View statistical software to analyze the association betweenbanks and profitability of Pakistani and Chinese listed banks. The empirical analysis definesthe case of Pakistani and Chinese listed banks; the bank's sizehas significantly butnegatively associated with the bank’sprofitability. Findings revealed that the economy of scale is necessary for Pakistani and Chinese listed bank’s profitability. The CEO education and macro-economic factors, GDP, inflation, and exchange rate have strong associations with Pakistani and Chinese listed banks' profitability and efficiency.

Key words: Education, Bank size, Macroeconomic factors, Profitability, Listed banks

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