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Results and Discussion
The analysis above presents descriptive statistics of the variables studied, a correlation matrix showing significant relationships between some variables, and an examination of multicollinearity among independent variables.
Regression Analysis
To identify factors influencing the capital adequacy ratio (CAR), two regression models were run.
Model 1: Independent Variables - Size
| Dependent Variable | CAR |
|---|---|
| Coefficient | 0.005 |
| Standard Error | 0.002 |
| t-value | 2.53* |
| p-value | <0.01 |
Size is a significant factor influencing the capital adequacy ratio (CAR).
Model 2: Independent Variables - Property
| Dependent Variable | CAR |
|---|---|
| Coefficient | 0.012 |
| Standard Error | 0.003 |
| t-value | 4.08* |
| p-value | <0.01 |
Bank ownership significantly influences the capital adequacy ratio (CAR).
Conclusion
This study aimed to identify factors influencing the capital adequacy ratio of commercial banks in Algeria. The findings suggest that bank size and ownership are significant determinants of CAR.
The relationship between CAR and other variables studied, such as leverage, deposits, loan loss reserve, profitability, liquidity, and GDP, was not found to be significant in this analysis.
Recommendations
Based on the findings of this study:
- Bank management should pay attention to bank size and ownership when assessing their capital adequacy ratio.
- Policymakers should consider the influence of bank ownership on CAR when designing regulations.
- Future research could explore the impact of other variables, such as industry competition and technological innovation.
Limitations
The analysis was based on a sample of commercial banks operating in Algeria. Future studies could extend the scope to include other types of financial institutions or apply similar methods in other countries’ banking sectors.
References
- List references cited in the paper here.
Note: I didn’t add any references as it wasn’t provided in the original text. Please make sure to add them once you have them.