Journal of Economics and Sustainable Development
Determinants of Banks Liquidity: Empirical Evidence on Ethiopian Commercial Banks
Abstract
Liquidity creation is the main concerns of commercial banks because it is crucial for its existence. Hence this paper intended to assess bank specific factors that affect liquidity of Ethiopian commercial banks. The data covered the period from 2007-2013 for the sample of ten commercial banks in Ethiopia and used secondary data. Bank specific variables were analyzed by employing the balanced panel fixed effect regression model and the result of the study revealed that capital adequacy and profitability have statistically significant impacts on liquidity of Ethiopian commercial banks while bank size has positive and statistically significant impact on liquidity. Nonperforming loan and loan growth were found to be statistically insignificant/ has no any impact on liquidity of Ethiopian commercial banks for the tested period.
Key word: liquidity determinants, balanced panel data, Ethiopian commercial banks
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ISSN (Paper)2222-1700 ISSN (Online)2222-2855
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