Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

Li, Xiaonan; Song, Chang

doi:10.1186/s11782-021-00104-x

Frontiers of Business Research in China

Table 9 Cross-sectional analysis: heterogeneity of city commercial banks

From: Does the target market affect bank performance? Evidence from the geographic diversification of city commercial banks in China

Dependent variable	Above median					Below median
Dependent variable	(1) ROA	(2) ROE	(3) NPL ratio	(4) Cost	(5) Market share	(6) ROA	(7) ROE	(8) NPL ratio	(9) Cost	(10) Market share
Panel A:Bank size
1–HHI	− 0.003 (0.016)	0.007 (0.039)	1.598^b (1.043)	0.002 (0.004)	0.348^c (0.091)	− 0.002 (0.026)	− 0.007 (0.071)	1.241 (0.825)	0.008 (0.007)	0.254^c (0.045)
N	447	447	447	447	447	361	361	361	361	361
R²	0.777	0.780	0.578	0.783	0.979	0.846	0.725	0.702	0.704	0.982
Panel B:Bank age
1–HHI	−0.002 (0.003)	−0.049 (0.048)	1.425 (1.103)	0.007 (0.005)	0.332^c (0.074)	− 0.007^b (0.003)	− 0.116^b (0.048)	1.377^a (0.801)	0.009 (0.005)	0.310^c (0.056)
N	456	456	456	456	456	352	352	352	352	352
R²	0.648	0.651	0.406	0.625	0.986	0.840	0.741	0.874	0.721	0.981
Panel C:Capital adequacy ratio
1–HHI	−0.001 (0.003)	−0.018 (0.038)	0.814 (0.670)	0.002 (0.004)	0.187^c (0.054)	− 0.007^b (0.003)	− 0.121^b (0.054)	4.410^c (1.226)	0.015^b (0.007)	0.519^c (0.086)
N	427	427	427	427	427	381	381	381	381	381
R²	0.810	0.719	0.532	0.817	0.987	0.652	0.670	0.562	0.595	0.969
Panel D:NPL
1–HHI	−0.005^c (0.002)	−0.087^c (0.031)	3.642^b (1.502)	0.013^b (0.006)	0.411^c (0.093)	− 0.004 (0.003)	− 0.069 (0.046)	0.699 (0.507)	0.007 (0.005)	0.161^c (0.033)
N	419	419	419	419	419	389	389	389	389	387
R²	0.589	0.615	0.611	0.593	0.974	0.832	0.680	0.676	0.797	0.980
Panel E:Non-interest income
1–HHI	−0.010^c (0.003)	−0.115^c (0.044)	3.094^a (1.613)	0.001 (0.006)	0.262^c (0.075)	− 0.003 (0.003)	− 0.036 (0.046)	1.806^b (0.823)	0.011^b (0.005)	0.373^c (0.065)
N	432	432	432	432	432	376	376	376	376	376
R²	0.702	0.707	0.510	0.497	0.976	0.832	0.729	0.620	0.865	0.981

This table shows the results of cross-sectional analyses. The sample was divided into two subsamples, Large and Small, based on the sample medians of bank size, bank age, capital adequacy ratio, non-performing loan, and non-interest income. Year and Bank fixed effects are controlled. Standard errors are robust and reported in parentheses. ^a, ^b, and ^c indicate significance at 10%, 5%, and 1%levels, respectively

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