Business Administration in Finance

Permanent URI for this collection

http://etd.aau.edu.et/handle/123456789/4

Browse

Browsing Business Administration in Finance by Author "Abebe Yitayew"

Now showing 1 - 11 of 11
  • No Thumbnail Available
    Item
    Determinants of Ethiopian Foreign Direct Investment Inflows: Bounds Testing Approach
    (Addis Ababa University, 2019-06) Tamirat Hailu; Abebe Yitayew
    The very purpose of this research paper is to investigate the long run relationship between foreign direct investment (FDI) and its determinants in Ethiopia. Accordingly, bounds testing approach to Auto Regressive Distributed Lag (ARDL) model has been utilized to test co-integrations among the variables of interests in Ethiopia for the period 1992-2017. Taking foreign direct investment as a dependent variable and real GDP per capita, consumer price index, exchange rate, public debt, gross fixed capital formation and human capital as independent variables, co-integration test has been conducted. The result confirm long run association among these variables. Subsequently, from the long run estimation result output, real GDP per capita as a proxy for market size, gross fixed capital formation as measure of infrastructure development and exchange rate depreciation have positive significant effect on foreign direct investment inflows; but negative and significant effect of consumer price index on foreign direct investment inflows to Ethiopia have been found in the long run. The short run relationship and error correction model (ECM) result reveals positive and significant impact of consumer price index and gross fixed capital formation on FDI inflows. Exchange rate is affecting FDI inflows negatively in the short run as it is shown by the study. The policy of promoting the economy through creating enabling investment climate to increase the output of the economy, maintaining macroeconomic stability, ensuring market determined exchange rate and developing the infrastructure to increase FDI inflows have been recommended.
  • No Thumbnail Available
    Item
    The Determinants of Financial Performance of Commercial Banks in Ethiopia
    (Addis Ababa University, 2018-05) Solomon Zergaw; Abebe Yitayew
    This study attempts to extensively investigate the determinants of financial performance of state owned and private-owned commercial banks in Ethiopia . The author has chosen one of the most popular methods for measuring banking performance, the CAMELS model approach, which is an acronym for the terms, Capital adequacy, Asset quality, Management quality, Earnings ability, Liquidity and Sensitivity to Market risk. The study used quantitative research approach and secondary financial data are analyzed by using multiple linear regression models. Fixed effect regression model was employed on a panel data obtained from audited financial statements of a sample 7 banks, which were selected using judgmental sampling technique, from 2004-2016 to investigate the impact & relationship of internal (bank specific) and external (macroeconomic) factors with bank profitability measure of ROA. The internal factors used in this study include Capital adequacy; Asset Quality, Management Quality, Earning ability & Liquidity Management, whereas the external factors are real GDP and Inflation. Moreover, Based on the regression result, all internal (endogenous) variables except Liquidity affect performance of the bank at 1% and 5% significance level and from external (exogenous) variables Inflation have significant effect on the performance of banks at 5% significance level. However, Real Gross Domestic Product (RGDP) have insignificant effect on financial performance of commercial banks in Ethiopia. Eventually, the study is attentive in its evaluation process pursuing meanigfull analysis that clearly identifies the Ethiopian banking sector strengths and challenges in all financial and managerial areas.
  • No Thumbnail Available
    Item
    Digital Literacy as a Mediator Between Perceived Usability and Mobile Banking Adoption in Addis Ababa
    (A.A.U, 2026-01-02) Selam Leykun; Abebe Yitayew
    Adoption of mobile banking is shaped by usability, trust, security and digital literacy. However, current studies are centered on the conventional technology acceptance models without considering digital literacy as a mediating factor in mobile banking usability and adoption. Moreover, the previous works being carried on mobile banking adoption of Ethiopia have only focused on technological infrastructure and convenient of using banking services, but not taking into account barriers from system user such as digital literacy and trust. This study, thus, investigated the mediating role of digital literacy in the relationship between customer-perceived usability and mobile banking adoption, focusing on five major banks in Addis Ababa: Commercial Bank of Ethiopia, Bank of Abyssinia, Awash Bank, Dashen Bank, and Hibret Bank. A quantitative research approach with explanatory design was employed. Primary data collected from 289 respondents through a structured questionnaire were used for analysis. Convenience sampling was applied to ensure access to diverse bank users. Data analysis involved descriptive and inferential statistics, including correlation tests and multiple linear regression. Findings revealed that digital literacy significantly mediates the relationship between usability and adoption, enabling customers to navigate mobile banking applications and conduct financial transactions with confidence. However, adoption barriers persist, particularly in areas of security transparency and fraud mitigation. The study underscores the need for banks to integrate digital literacy programs with usability enhancements to foster greater adoption. Keywords: Digital Literacy, Digital Competency, Financial Services Innovation, Mobile Banking Adoption, Mobile Banking Usability, Security Concerns, Technology Acceptance
  • No Thumbnail Available
    Item
    Estimation of Optimal Hedge Ratio for Oil Futures: An Application to the Ethiopian Petroleum Supply Enterprise
    (Addis Ababa University, 2019-05) Tesfaye Belete; Abebe Yitayew
    Ethiopian Petroleum Supply Enterprise, the sole importer of different oil products in Ethiopia is exposed to price fluctuation risk. Hedging oil with futures contract can offset this risk. So, the most important issue is to what extent or percentage the risk exposure should be hedged with futures contract. The aim of this thesis is to estimate an optimal hedge ratio that will provide the highest price risk reduction using monthly spot and futures price from October, 1990 to March ,2019. Hedge ratios and hedging effectiveness are determined by employing three models namely: Naïve, OLS (Ordinary Least Square) and ECM (Error Correction Model). Hedging effectiveness is evaluated and compared for the three models. The empirical results show that the ECM model provide highest variance(risk) reduction as compared to other models indicating that this model fits better in designing hedging strategy for EPSE. The empirical finding suggests that the EPSE can use oil futures contract as an effective instrument to minimize price fluctuation risk.
  • No Thumbnail Available
    Item
    Factor Affecting Profitability of Banks in Ethiopia: The Case of Selected Commerial Banks
    (A.A.U, 2024-06-13) Afomiya Abebe; Abebe Yitayew
    This study aims to examine the impact of capital adequateness liquidity, and asset quality on the profitability of Ethiopian banks from 2013 to 2022. The study employed a quantitative research design and collected data through Secondary data were gathered from the annual audited financial statements of selected banks from NBE in order to meet the study's objectives. Purposive sampling was employed in the study, with Ethiopian commercial banks serving as the study population. Correlation and OLS regression analysis were utilized for inferential data analysis. Liquidity, capital adequacy, and asset quality were the study's independent variables. Return on asset (ROA) was the dependent variable used to determine profitability. The study's model result showed that while liquidity has a statistically significant negative impact on ROA, asset quality and capital adequacy have positive, statistically significant effects on ROA. The study suggests that more research be done on the qualitative relationship that asset quality, capital adequacy, and liquidity have with bank profitability. Future studies may be able to investigate the effects of asset quality, capital adequacy, and liquidity on profitability. In order to uncover hidden insights into the relationship that interacts with bank profitability, future studies involve interviewing significant informants in the banking sector. Key Words: Bank of Ethiopia, Asset Quality, Capital Adequacy, Liquidity, Profitability
  • No Thumbnail Available
    Item
    Factors Affecting Banks Liquidity: Emperical Evidence from Selected Ethiopian Private Commercial Banks
    (A.A.U, 2026-02-02) Atnanaw Sewhunegn; Abebe Yitayew
    Liquidity is one of the major concerns for private commercial banks in Ethiopia and holding the optimum level of liquidity is crucial. Since many of the empirical studies carried out on the commercial banking industry of Ethiopia were mainly focused on examinations of factors influencing the profitability of banks, and limited attention was given to consider the bank’s liquidity and its determinants the objective of this study was to identify the determinants of liquidity position of private commercial banks in Ethiopia. Quantitative research approach and explanatory design adopted to show the cause and effect relationship between the dependent and independent variables. Balance panel data was collected from a sample of eight private commercial banks in Ethiopia from 2018 to 2024 by using purposive technique. Both bank specific and macroeconomic variables were analyzed using both inferential (balanced panel pooled effect regression model) and descriptive statistic (both graphical and summary statistics) with the aid of Stata19.5 software. The dependent variable (bank’s liquidity) measured as the ratio of total customers loans and advance to its total deposit. The findings of the study revealed that at 5% significance level among the bank specific factors bank size and non-performing loan have negative and statistically significant impact on liquidity; while, profitability and capital adequacy ratio have positive and statistically significant impact on liquidity of Ethiopian private commercial banks. On other hand, from the macro-economic level factors except the foreign exchange rate all variables (GDP, CPI and IRM) have negative and statistically significant impact on private commercial banks liquidity. However; loan growth, deposit growth and foreign exchange rate have no statistically significant effect on the liquidly of Ethiopian private commercial banks. As the ratio of loans and advances to deposit LR of 0.796, indicated that the sampled banks on average does not offered loans to their clients almost 20.38% (greater than the threshold amount of 15% set by NBE) which implies that as far as considering the quantitative factors considered the sampled commercial banks have moderate liquidity risk. Finally, the study provides useful insights for interested parties on the liquidity levels of Ethiopian commercial banks and their determinants and contributes to the scarce empirical evidence. Keywords: Determinants of Liquidity, Ethiopian Private Commercial Banks, Liquidity Ratio, balanced panel data regression analysis.
  • No Thumbnail Available
    Item
    The Impact of Corporate Governance Mechanisms on Firm's Financial Performance: Evidence from Commercial Banks in Ethiopia
    (2012-06) Ferede Yenesew; Abebe Yitayew
    Corporate governance has become an issue of global significance and has received new urgency due to various corporate scandals and failure. This paper investigates the impact of corporate governance mechanisms on firms' financial performance using five years data from the year 2007 to 2011 with a sample of eight Ethiopian commercial banks. Three financial performance indicators such as return on asset, return on equity and net interest margin were used. Corporate governance mechanisms considered in this study include board size, board gender diversity, board members educational qualification, board members business management and industry specific experience, and audit committee size. The study controls the effect of size, leverage and growth of banks. The regression results show that large size board and audit committee negatively influences financial performance; whereas board members educational qualification positively associated with financial performance. While industry specific experience of director positively related with return on asset but it has a negative effect on net interest margin. Finally, the percentage of female directors and board members business management experience does not have a significant effect. In general, the findings suggest that banks with effective corporate governance mechanisms improve financial performance depending on the measure used although not all corporate governance mechanisms are significant. Keywords: Corporate Governance Mechanisms, Agency Theory, Financial Performance Commercial Banks and Ethiopia.
  • No Thumbnail Available
    Item
    Operational Challenges and Opportunities of Interest Free Banking in Ethiopia: The Case of Commercial Bank of Ethiopia
    (A.A.U, 2023-02-04) Mulushewa Kibret; Abebe Yitayew
    The main objective of the study is examining the operational challenges and opportunities of Interest Free Banking in Ethiopia, particularly, in Commercial Bank of Ethiopia empirically. To accomplish the intended purpose of this study, survey method of descriptive research design was used to gather data. Primary data was collected through interviews and questionnaires to answer the research questions. In addition secondary data extracted from internal reports and survey of the bank. Respondents were sampled from IFB employees of Commercial Bank of Ethiopia to achieve the objectives of the study. Data was collected through questionnaire by using random sampling from a sample of 155 IFB staffs 135 were properly filled and returned the questionnaires. The data collected from the questionnaire were analyzed using SPSS statistical tools such as percentages and frequency. The result indicate that legal and regulation framework, low level of awareness of practitioners, lack of commitment, taxation related issues, lack of trust by customer about segregation of funds, wrong perception of Interest Free Banking or wrongly associated with religion and weak shari’ah experts functionality are the major challenges of IFB operation in Ethiopia. Further the finding of the study showed that interest free banking creates opportunity to the bank to mobilize the idle resource which was out of bank system through enhancing customer base and it is helpful to the economy as well. Thus, the National Bank of Ethiopia as a regulatory body, the government and banks should give more emphasis for the challenges that they face on the operation to have those mentioned opportunities and inclusive growths.
  • No Thumbnail Available
    Item
    The Effect of Telecom Subscribers on Bank's Profitability
    (A.A.U, 2023-12-16) Biruk Tilahun; Abebe Yitayew
    Telecommunications infrastructure is critical for banks' day-to-day operations. Due to easy access to telecommunication services, online banking transactions have shown a huge increase over the years. Going to bank branch offices is now only for critical issues, as most banking transactions can be held online using different banking applications. Different studies have assessed the effect these applications have on banks' performance like Mobile banking, Internet banking, Mobile money, ATMs, and others. However, limited studies are showing the effects of telecommunication subscribers on banks' performance. This study assessed whether telecommunication subscribers' increase or decrease affects banks' profitability. The study used the last ten years’ financial data of Ethiopia’s private commercial banks. Telecommunication data was collected from Ethio Telecom. The data collected was analyzed by use of descriptive statistics, and statistical software, Stata. The study found that there is no direct effect of telecommunication subscribers' increase on banks' profitability. The study recommended banks continue focusing on creating efficiencies using the telecommunication infrastructure as the increase in telecommunication subscribers by itself will not result in the bank’s profitability. Key Words: Telecommunications, bank profitability, mobile and fixed telecom subscribers, Ethio Telecom
  • No Thumbnail Available
    Item
    The Practices and Challenges of Foreign Currency Generation in Commercial Bank of Ethiopia
    (AAU, 2023-05-11) Tofik Rahmeto Issa; Abebe Yitayew
    The main objective of the study is to examine the challenges of foreign currency generation in Commercial Bank of Ethiopia, using primary and secondary data source from a survey of a random sample of 386 respondents/employees. To deal with this, the researcher has used both descriptive and binary logistic regression model as a tool. In the descriptive analysis part the CBE’s share reached as low as 8% in 2020/21 from 32% 2014/15. The remittances that except 2015/16 and 2017/18 its growth rate gradually dropped. In econometrics analysis; internal conflict, absence of foreign currency deposit, less work with development partners and weak employees’ knowhow have a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01) and makes low generation of foreign currency. Also, work with few industrial parks has a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.05). Few dominated agricultural export and National Bank of Ethiopia’s directives have a negative significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01). Furthermore, participated in Africa Opportunity and Growth Act, fair charges of money transfer organizations and less intermediaries have a negative significant effect on the challenges of foreign currency generation at 5% level of significance(P<0.05). The researcher has recommended that the government should stop the internal conflict and maintain peace and security in the country and formulate policies that help to participate in Africa Growth and Opportunity and Act. Also, the government should control illegal intermediaries. In addition, the Bank should work with industrial parks and development partner.
  • No Thumbnail Available
    Item
    The Practices and Challenges of Foreign Currency Generation In Commercial Bank of Ethiopia
    (AAU, 2023-09-13) Tofik Rahmeto ; Abebe Yitayew
    The main objective of the study is to examine the challenges of foreign currency generation in Commercial Bank of Ethiopia, using primary and secondary data source from a survey of a random sample of 386 respondents/employees. To deal with this, the researcher has used both descriptive and binary logistic regression model as a tool. In the descriptive analysis part the CBE’s share reached as low as 8% in 2020/21 from 32% 2014/15. The remittances that except 2015/16 and 2017/18 its growth rate gradually dropped. In econometrics analysis; internal conflict, absence of foreign currency deposit, less work with development partners and weak employees’ knowhow have a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01) and makes low generation of foreign currency.Also, work with few industrial parks has a positive significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.05). Few dominated agricultural export and National Bank of Ethiopia’s directives have a negative significant effect on the challenges of foreign currency generation at 1% level of significance (P<0.01). Furthermore, participated in Africa Opportunity and Growth Act, fair charges of money transfer organizations and less intermediaries have a negative significant effect on the challenges of foreign currency generation at 5% level of significance(P<0.05). The researcher has recommended that the government should stop the internal conflict and maintain peace and security in the country and formulate policies that help to participate in Africa Growth and Opportunity and Act. Also, the government should control illegal intermediaries. In addition, the Bank should work with industrial parks and development partner