Economics

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Effects of Economic Policy Uncertainty on Credit Risks and Banks’ Lending Decisions: Evidence from Ethiopian Commercial Banks
(A.A.U, 2023-07-04) Fanuel Gizaw; Befekadu Degife(PhD)
The objective of this study is to explore the effects of economic policy uncertainty on credit risk and lending decision of 12 Ethiopian commercial banks for the period spanning from 2010– 2021. In order to analyze the relationship between credit risk measured by non performing loan ratio and lending decisions measured by growth rate of loan and economic policy uncertainty controlled bank specific and macroeconomics variables, the study employed two fixed effect (within) panel regression Models. The empirical results revealed that economic policy uncertainty has a significant positive effect on credit risk (nonperforming loan ratio), and a significant negative effect on lending decisions (growth rate of loan). Furthermore, bank size and gross domestic product have significant negative relation with non performing loans and have significant positive relationship with growth rate of loans. However, lending interest rate has a significant positive relationship with nonperforming loan and has a significant negative link with lending decision of Ethiopian commercial banks.
Credit Risk and Technical Efficiency in Ethiopian Commercial Banks
(A.A.U, 2022-06-22) Tamrat Mekonen; Guta Legesse (PhD)
This study examined the relationship between credit risk and technical efficiency of Ethiopian commercial banks in the period from 2012/13 to 2017/18. The two-stage data envelopment analysis model was used to obtain efficiency scores. The estimated result of the constant returns to scale assumption indicates that the commercial bank of Ethiopia and Dashen bank are inefficient, whereas Debub Global bank, Addis International bank, and Zemen bank are more than efficient compared to the other. Similarly, the estimated result of variable return to scale assumption showed that Commercial bank of Ethiopia and Dashen bank are shown to be inefficient, whereas Addis International bank, Development bank of Ethiopia and Debub Global bank are found to be more efficient. It is also found that, in compared to the commercial banks included in the study, united bank and Debub global bank are the most scale efficient commercial banks in Ethiopia, whereas Bunna international bank and Ethiopian Development Bank are the least scale efficient banks. In the second stage to estimate the relationship between credit risk and technical efficiency score of commercial banks as we used Tobit model. The finding indicates that credit risk has negative and statistical significant effect on Ethiopian commercial bank’s technical efficiency. The higher the credit risk is the lower the efficiency scores and those commercial banks that manage to maintain their continuity in the market and diversify their products had higher efficiency scores, however generating greater benefits to their shareholder. Furthermore, the findings also indicate that liquidity risk, return on asset and capitalization have positive and significant effects on the technical efficiency score of the commercial banks under study, whereas ownership structure have negative and significant effects, but market share is a positive and insignificant variable under this study.
The Effect of Foreign Direct Investment on Economic Growth in Sub-Saharan Africa: Moderation Analysis
(A.A.U, 2024-06-17) Tegegn Tise; Mengesha Yayo (PhD)
Considering the empirical and literature gaps as well as ongoing debates and dilemmas about the effect of Foreign Direct Investment (FDI) on economic growth in sub Saharan African countries, the objective of this study is to examine the effect of foreign direct investment (FDI) on economic growth in sub-Saharan African countries and the moderating roles of macroeconomic stability, infrastructure development, and trade openness on this relationship. Using panel data for 18 sub-Saharan African countries from 2000 to 2022, the study employs System GMM (Generalized Method of Moments) and structural equation modeling techniques to analyze the dynamic relationships. The findings indicate that Foreign Direct Investment has a positive and significant effect on economic growth in the region. However, the effectiveness of FDI in promoting growth is found to be contingent on the prevailing macroeconomic conditions, level of infrastructure development, and degree of trade openness. Specifically, the results show that macroeconomic stability and infrastructure development positively moderate the FDI-growth nexus, enhancing the growth-inducing impact of FDI. Conversely, trade openness is found to negatively moderate this relationship, suggesting that excessive trade liberalization may limit the growth benefits of FDI inflows. These findings underscore the importance of establishing conducive macroeconomic environment, investing in infrastructure, and carefully managing trade policies to maximize the growth-enhancing effects of foreign direct investment in sub-Saharan Africa. The study provides valuable policy implications for governments and policymakers in the region aimed at leveraging FDI to foster sustainable economic development. Key Words: Foreign Direct Investment (FDI), Economic Growth, Sub-Saharan Africa, Macroeconomic Stability Infrastructure Development, Trade Openness
Factors Affecting the Profitability of Private Commercial Banks in Ethiopia: A Panel Data Analysis (2012-2023)
(A.A.U, 2024-06-15) Wuletaw Adamu; Atnafu GebremeskeL (PhD)
The primary aim of this study is to examine the factors that affect private commercial banks profitability in Ethiopia between 2012 and 2023. The National Bank of Ethiopia and the yearly audited financial reports of 13 particular private commercial banks were consulted by the researcher in order to accomplish this goal. We examined the factors affecting private commercial banks profitability using descriptive analysis, correlation analysis and Random effect panel data regression analysis. Return on assets (ROA) was used as the proxy for profitability and the dependent variable. The findings of this study conclude that bank size, non-interest income, market share, and GDP growth rate had a positive and significant effect on the profitability of private banks in Ethiopia. In contrast, credit risk and operational cost efficiency ratio negatively and significantly impacted profitability. The study also found that loan deposit ratio, capital adequacy, and inflation had an insignificant effect on the profitability of private banks. The major findings of the study show that bank size, credit risk, operational cost efficiency, non-interest income, and market share are very important in explaining profitability with a highly significant value. Therefore, due attention should be given to ensuring factors specific to banks and the industry for the better performance and profitability of private commercial banks in Ethiopia. Key Words: private commercial banks of Ethiopia, profitability, Random Effect panel model
The Determinants of Banking System Stability in Ethiopia: A Panel Regression Analysis
(A.A.U, 2024-06-15) Yitayal Demissie; Gebeyehu Manie (PhD)
Research on the factors influencing stability of banks has shown that both external and bank-specific factors have impacts on banks’ financial stability. Nevertheless, the majority of the studies were carried out in industrialized countries, where banks typically have greater wealth and greater fluidity than banks in developing countries have. This thesis investigates the determinants of banks system stability in Ethiopia through a panel regression analysis encompassing 16 commercial banks for the time period 2015 to 2023. The thesis employed the Generalized Method of Moments (GMM) regression technique to address endogeneity concerns, specifically unobserved heterogeneity. The results show that prior year's banks stability positively affects the current year's stability, suggesting persistence in banks performance. Equity-to-asset ratio (ETA) shows a negative impact on banks stability, indicating that higher efficiency values from previous periods may lead to current volatility. Return on equity (ROE) demonstrates an inverse relationship with banks stability, suggesting that historically high profitability may lead to future instability. Additionally, increased mobilized share capital and economic growth positively correlate with banks stability, indicating that higher capital buffers and favorable economic conditions enhance financial stability. These findings provide valuable insights for policymakers and bank management. Keywords: Bank Stability, GMM, Z-Score, Ethiopia
Trade Effect of Chinese Belt and Road Initiative: Evidence from Sub-Saharan African Countries
(A.A.U, 2024-07-23) Degu Zinabe Fentaw; Mengesha Yayo (PhD)
Trade Effect of Chinese Belt and Road Initiative: Evidence from Sub-Saharan African countries Degu Zinabe Fentaw Addis Ababa University, 2024 Chinese Belt and Road Initiative (BRI) is the most recent and inclusive initiative launched in 2013 with the goals of policy coordination, facilities connectivity, unimpeded trade, financial integration and people to people interaction between China and member countries. Since BRI would bring improvement in the infrastructure gap, its contribution in deceasing cost of trade was expected very significant. But its real impact on the case of Sub-Saharan Africa region wasn’t well indicated by other empirical studies. The main objective of the current study was to examine the trade effect of BRI on Sub-Saharan Africa region. This study employed a panel data set from 2018-2022 involving 26 reporting and 22 partner sampled countries. It used augmented gravity model with PPML estimation technique. According to the findings of this study, BRI has a positive contribution in trade; it resulted in up to 7.1% trade creation effect for Sub-Saharan Africa region. GDP of reporting countries, GDP per capita of both reporting and partner countries, bilateral exchange rate, land locked, common border, common colonizer and having common official language were significantly associated variables with the bilateral trade. BRI improves trade performance of Sub-Saharan Africa region. But it is strongly recommended that policy harmonization, addressing production bottlenecks particularly in the manufacturing sector, measurements in knowledge transfer should be emphasized to optimize the contribution of BRI.
Factors Affecting Credit Risk on Ethiopian Commercial Banks: Dynamic Panel Data Models
(A.A.U, 2024-06-08) Gashaye Keskis; Tefere Daba (PhD)
Low follow up after disbursement of the loans and weakness of identifying key costumers which were arise bank- specific factors by bank’s risk management team. Also, financial or economic crises may make the banking sector exposed to high credit risks, which may lead to high levels of default. Furthermore, the high level of debt burden ratio may make customers unable to pay their financial obligations, thus increasing credit risks. The current study is in line with this and aims to examine the determinants of the nonperforming loans (NPLs) in Ethiopian banking sector. To that effect, we consider internal factors that include bank-specific variables, and external factors that involve bank-specific and macroeconomic variables. We estimate a dynamic panel data model by the system Generalized Method of Moments (GMM) for a set of 13 Ethiopian commercial banks based on annual data covering the period from 2010 to 2022. The finding revealed that for which the importance of bank-specific factors in explaining the NPLs ratio. In actual terms, there were significant and positive linkages between the one-period lagged NPLs ratio, cost efficiency ratio return on equity (bank performance) and the capital adequacy ratio on the one hand, and the NPLs ratio on the other hand, and significant and negative linkages between the bank size, loan growth rate, loan deposit ratio and the NPLs ratio.The study provides important recommendations for bank decision makers in the Ethiopian commercial banks. Indeed, they should work on improving the operational efficiency and enhancing credit risk management and risk management in the banking sector, developing the operational framework for the monetary policy of central banks, enhancing the opportunities to benefit from the credit information industry, boosting the government's role in adopting economic policies that support investment, developing stress tests for banks, and adopting early warning systems.
Essays on Firm-Level Industry Policy Incentives and Capability Building in the Context of Developing Countries
(A.A.U, 2024-05-27) Moges Tufa; Måns Söderbom(Prof)
This study evaluates the impact of a sector-specific industrial policy program on the performance of Ethiopian chemical manufacturing firms using a quasi-experimental design The data for the study come from firm-level field surveys and administrative sources. To account for heterogeneity and selection bias due to observable and unobservable factors, we employ a range of empirical strategies, including Quantile Regression, Propensity Score Matching (PSM), Endogenous Switching Regression (ESR), and Generalized Propensity Score (GPS) models. We also used alternative estimation methods that fit our data and sample size. Our findings show that the program has a positive and significant effect on the productive capacity utilization of beneficiary firms, while there is no evidence of any impact on employment generation. The results show that the program’s beneficiary firms utilized an actual productive capacity of 4.5%-7.6% more than non-beneficiaries. We conclude that the program has mixed effects on the performance of domestic chemical manufacturing firms. This study contributes to the scant literature that provides empirical evidence that informs public policy decisions in the context of developing countries.
Perception of Workers on the Impact of Financial Technology on Bank Profitability: The Case of Commercial Bank of Ethiopia
(A.A.U, 2024-06-25) Yared Deneke; Girma Estiphanos (PhD)
One of the most important strategies banks employ to be profitable and competitive in the banking industry is financial innovation. Using the six financial technology dimensions, this study investigates how financial technology affects bank profitability based on the perceptions of employees at the Commercial Bank of Ethiopia. The impact of fintech on bank profitability was evaluated using the six fintech dimensions, namely ATM, mobile banking, online banking, POS, mobile wallet, and electronic fund transfer. To achieve the research objectives, the study used a descriptive and explanatory research design. To obtain a representative sample from the population, a purposive sampling technique was employed. Using a structured questionnaire, the required data was gathered from Commercial Bank of Ethiopia employees working in branches located in the city of Addis Ababa. A total of 350 out of the 395 questionnaires that were distributed to gather data were returned. Version 26 of the Statistical Package for the Social Sciences (SPSS) was used to process the data. Out of the six financial technologies, four have a positive beta (β) value, indicating a positive association and significant influence on bank profitability. In contrast, two predictors, ATM and POS, insignificantly affect bank profitability, with ATM also having a negative β coefficient, indicating a negative relationship with profitability. Internet banking is the best predictor among all explanatory variables, and it is important to fully utilize it to increase bank profitability.
Education and Economic Growth in Sub-Saharan African Countries: The Moderating Role of Education Expenditure
(A.A.U, 2024-09-03) Tsion Mekonen; Alemu Lambamo (PhD)
Even though education has been highlighted in several empirical literature, as a factor that could spur up economic growth, the level of education in sub-Saharan Africa is not effectively channeled into desired levels of economic growth. However, there is an indication in the literature that education will be more relevant to the economic growth of sub-Saharan African economies that maintain strong and effective education spending. This study investigates the relationship between education and economic growth, with a particular focus on the moderating role of education expenditure. Utilizing a dynamic panel data model, the analysis covers annual data from 41 sub-Saharan African countries between 2001 and 2022. Employing the system Generalized Method of Moments (GMM) estimation technique, the results indicate that education expenditure moderates the effect of education on economic growth in these economies. The study’s findings also shows that GDP per capita growth rate is positively correlated with primary education, secondary education, tertiary education, export, consumption and gross domestic saving while it is negatively correlated with labor force, gross fixed capital formation, education expenditure, import and inflation. The study concluded that education with the support of effective education spending will boost productivity and this resulted in increasing the level of economic growth. It is therefore recommended that sub-Saharan African economies should apply appropriate measures to boost their education spending so that gains from the education sector can effectively be channeled into economic growth.
The Effectiveness of Fiscal Policy in Driving Economic Growth in Ethiopia: A macro-economic perspective
(A.A.U, 2024-09-07) Geremew Adere; Fantu Guta (Ph.D)
This study examines the effectiveness of fiscal policy in driving economic growth in Ethiopia from a macroeconomic perspective, using time-series data spanning 1991 to 2023. Employing the Autoregressive Distributed Lag (ARDL) model, focusing on key variables such as government expenditure, government revenue,ivestmet,inflation, interest rates, and real GDP growth. The analysis reveals that Ethiopia's fiscal policy, characterized by significant government spending on development projects, has contributed to sustained economic growth despite persistent fiscal deficits. However, the findings highlight challenges such as inflation volatility, inefficiencies in revenue collection, and the reliance on borrowing to finance deficits, which undermine macroeconomic stability. The study underscores the need for improved policy coordination to enhance revenue mobilization, control inflation, and optimize public spending, ensuring fiscal policy continues to support sustainable growth in Ethiopia.
Education and Economic Growth in Sub-Saharan African Countries: The Moderating Role of Education Expenditure
(A.A.U, 2024-09-04) Tsion Mekonen; Alemu Lambamo (PhD)
Even though education has been highlighted in several empirical literature, as a factor that could spur up economic growth, the level of education in sub-Saharan Africa is not effectively channeled into desired levels of economic growth. However, there is an indication in the literature that education will be more relevant to the economic growth of sub-Saharan African economies that maintain strong and effective education spending. This study investigates the relationship between education and economic growth, with a particular focus on the moderating role of education expenditure. Utilizing a dynamic panel data model, the analysis covers annual data from 41 sub-Saharan African countries between 2001 and 2022. Employing the system Generalized Method of Moments (GMM) estimation technique, the results indicate that education expenditure moderates the effect of education on economic growth in these economies. The study’s findings also shows that GDP per capita growth rate is positively correlated with primary education, secondary education, tertiary education, export, consumption and gross domestic saving while it is negatively correlated with labor force, gross fixed capital formation, education expenditure, import and inflation. The study concluded that education with the support of effective education spending will boost productivity and this resulted in increasing the level of economic growth. It is therefore recommended that sub-Saharan African economies should apply appropriate measures to boost their education spending so that gains from the education sector can effectively be channeled into economic growth
Determinants of Ethiopian Commercial Banks Profitability
(AAU, 2024-12-25) Yonas Lakew; Habtamu Adane (PhD)
This study investigates the factors influencing the profitability of commercial banks in Ethiopia, utilizing Generalized Least Squares (GLS) methods on unbalanced panel data from 16 banks over the period of 1998 to 2023. In this study Return on equity (ROE) is the dependent variable in the random effect model regression analysis. It looks at how ROE is related to a number of internal and external factors, such as bank size, liquidity ratio, efficiency ratio, capital adequacy, loan-to-deposit ratio, GDP, and inflation. The findings reveal that GDP, bank size, loan-to-deposit ratios, capital adequacy, and efficiency ratios positively and significantly impact the profitability of Ethiopian commercial banks. Conversely, liquidity does not show a statistically significant effect, while inflation negatively affects profitability. Based on these insights, the study recommends that Ethiopian commercial banks pursue strategic mergers to enhance size and profitability, optimize loan to-deposit ratios, strengthen capital adequacy, implement effective cost management strategies, diversify revenue streams, and promote a stable economic environment to support GDP growth and mitigate inflation
Determinants of Banks Liquidity and Its Impact on Profitability on Selected Banks in Ethiopia
(AAU, 2025-02-06) Eyob Gezahegn; Sisay Regassa Senbeta (PhD)
The "Determinants of Banks Liquidity and Its Impact on Profitability in Selected Banks in Ethiopia" are reviewed in this paper, which covers the period from 2002 to 2022. The study uses both fixed effect and random effect panel data regression models to assess the factors influencing key financial ratios, such as the Loan to Deposit Ratio (LDR) and Liquid Asset to Total Asset Ratio (LATA), using a comprehensive dataset obtained from audited financial statements of sampled banks. Descriptive statistics indicate conservative lending practices and strong liquidity management among these banks, with notable variability observed across different financial metrics. The correlation analysis reveals there is moderately positive association between liquidity (measured by LATA) and profitability (measured by Return on Assets, ROA), suggesting that higher liquidity corresponds with increased profitability. Conversely, there is a significant positive correlation between LDR and Net Interest Margin (NIM), suggesting that effective asset-liability management enhances profitability. Panel unit root tests ensure the variables' stationarity post-differencing, thereby guaranteeing reliable regression outcomes. Model diagnostics, including tests for multicollinearity, normality, heteroscedasticity, and autocorrelation, validate the robustness of the regression models. The results underscore the importance of capital adequacy and effective asset-liability management in enhancing bank performance. This research contributes to the existing studies by providing nuanced insights into the financial trends with in the Ethiopian banking industry and offers practical implications for policymakers and banking professionals.
Determinants of Non-Performing Loans: The Case of Commercial Banks in Ethiopia
(A.A.U., 2023-06-09) Yordanos Belete Eshete; Sisay Regassa (PhD)
This study aims at investigating the determinants of non-performing loans in Ethiopian commercial banks from 2006 to 2021. The study used panel data on fourteen commercial banks obtained from the annual reports of each of the commercial banks and the national bank of Ethiopia. A fixed effect model was employed to analyses the determinants of NPLs. Results from the study indicate that capital adequacy ratio, loan growth, and return on assets have a negative and significant influence on NPLs. This study holds importance in bridging the research gap, as it is vital to understand the causes of NPLs to address the issue effectively. The study recommends that bank managers need to maintain a strong capital adequacy ratio, foster sound management practices to maximize return on assets, and establish comprehensive credit assessment and monitoring systems. These measures will help mitigate the risks associated with non-performing loans and support a stable banking sector, enabling banks to thrive and prosper in increasingly competitive financial markets.
The Effect of Political Instability on Economic Growth in Sub-Saharan African Countries
(A.A.U, 2022-06-08) Tsegayehu Agmasie; Abdurezack Hussein(PhD)
In this study, the relationships between political instability and economic growth in Sub Saharan African countries are deeply explored. Six individual political instability indicators from the World Bank’s world governance indicators database were used and aggregated into a single and more comprehensive political instability index by employing the techniques of principal component analysis. Then the impact of the composite political instability index on economic growth along with other economic variables are modeled by employing three simultaneous equations and estimated by dynamic panel GMM estimation approach which accounts for the endogeneity issues. The results from the GMM estimations reveal that political instability significantly hampers economic growth in SSA through its direct transmission mechanism by disrupting the available resources a country has at its disposal. The hypothesized indirect channel through which political instability negatively affects economic growth through FDI is found to be statistically insignificant. Panel causality tests along with the corresponding forecast error variance decompositions (FEVDs) and impulse response functions (IRFs) are performed to reinforce the results obtained from the GMM estimations. The results show that political instability and foreign direct investment (FDI) Granger-cause economic growth, while the reverse is not true. While it’s found that economic growth is the most endogenous of the main three target variables, FDI is the most exogenous one which is unresponsive to shocks of variables other than its own. The governments and policy makers of Sub Saharan African countries should target political instability as their policy variable since variations in the economic growth other than its own shocks are also explained by the shocks from political instability. Countries in SSA should not ignore factors leading to political instability and policies aimed at decreasing political instability should be pursued by these countries in order to maintain a stable economic growth.
The Impact of External Debt, Unemployment, and Inflation on Economic Growth: Evidence from Sub-Saharan African Countries
(A.A.U, 2022-06-08) Astaraki Animut; Helen Berga (PhD)
Achieving a high rate of economic growth, full employment, and price stability is key to macroeconomic policy objectives and a top priority for all countries worldwide. As a result, if these fundamental macroeconomic policy goals are to be realized, understanding the influence of external debt, unemployment, and inflation on economic growth is crucial. This study aims to examine the impact of external debt, unemployment, and inflation on economic growth in Sub-Saharan African countries. The study used panel data from thirty Sub-Saharan African countries from 2005 to 2019. The data were processed using STATA 15 software for the windows econometrics package. The researcher employed a dynamic panel regression model, the system generalized method of moments (system GMM) estimation strategy, and the Granger causality test. The study found that the three primary factors, external debt, unemployment, and inflation, have a significant negative relationship with economic growth in Sub-Saharan Africa. As external debt, unemployment, and inflation increased, all three variables had a detrimental influence on growth. Our results indicate that foreign debt, as a result of debt servicing, has a detrimental influence on growth by crowding out both private and governmental investment. This supports the debt-overhang hypothesis' applicability in the SSA African region. According to the findings, economic growth had no causal relationship with inflation, but it had a one-way causal relationship with unemployment and external debt which flowed from unemployment to economic growth and from economic growth to external debt.
A normal-Weighted Exponential Stochastic Frontier Model
(A.A.U, 2022-06-15) Misgan Desale; Adane Tufa (PhD)
This thesis introduces a new stochastic frontier model called a normal-weighted exponential stochastic frontier model. We have derived a closed form log-likelihood function and JLMS inefficiency estimator of a normal-weighted exponential stochastic frontier model. In addition, we have derived the gradient and hessian matrix of a normal-weighted exponential stochastic frontier model. A Monte Carlo (MC) simulation is carried out to verify the correctness of the derivations, of a normal-weighted exponential stochastic frontier model, and to study the finite sample properties of maximum likelihood estimator. Our simulation result shows that a normal weighted exponential stochastic frontier model performs well compared to a normal-exponential stochastic frontier model. In our simulation result, it shows that as sample size increases the bias and standard errors decreases. Moreover, a real data application is performed, and it is about estimation of carbon efficiency of manufacturing firms in Africa. We have estimated an input requirement production function, using fuel consumption as dependent variable and output and other inputs as independent variables. Our estimated result shows that the estimates of coefficients are the same across models. However, there is differences in carbon efficiency estimates of manufacturing firms. Using a normal-half normal stochastic frontier model, a carbon efficiency of manufacturing firms in Africa gives an estimate ranging between 1.002344 (99.8984%) and 1.002362 (99.8976%). For a normal-exponential stochastic frontier model the range of carbon inefficiency estimates are between 1.074752 (97.5092%) and 1.090364 (96.3126%). Similarly, for a normal-weighted exponential stochastic frontier model the carbon inefficiency estimates are between 1.122895 (95.0907%) and 1.237519 (91.1602%). We have used the carbon efficiency estimates to rank African countries and Egypt is the most carbon efficient country in Africa. We have also run a multiple linear regression on carbon inefficiency estimates to see the determinants. In all three stochastic frontier models: top manager work experience, obstacle to access finance, firm size, export status, and foreign ownership are the key determinants.
The Impact of COVID-19 on the Financial Sector: The Case of Private Commercial Banks in Ethiopia
(AAU, 2023-12-09) Niya Getachew; Migbaru Alamerewu PhD
The outbreak of a new strain of Coronavirus, now known as COVID-19, which has been classified as a global pandemic by the World Health Organization (WHO), has frightened the world. One aspect of the economy that is hit hard by the pandemic and its resultant outcome is the service sector. In Ethiopia, the financial sector faced a challenge by slowing the market, in particular by stalling its economic growth. This paper aims to examine the impact of covid-19 on the performance of the private commercial banking sector in Ethiopia concerning its key performance indicators. Mainly banking performance in return on investment, assets, and net interest margins. This study used DiD model to analyze the data obtained in the study. The DID analysis was employed to assess private banking sector growth in main indicators of performance before (2014-2018) and after Covid (2019-2021). The results indicate thattheDiD estimation model shows that the pandemic affected ROA and ROE negatively. However, the impact was not statistically significant during the study period. The other factor is NIM. In this factor, although it was affected positively the level of significance is low. Thus, it can be concluded that the pandemic has not affected the performance of the private commercial banks during the study period in a meaningful way. But the government is recommended to highly follow up on the banking financial sector to sustain shocks in the economy. This will lead to a sustainable economic outcome and growth for the private financial sector
Environment and Migration, Evidence from Ethiopian.
(A.A.U, 2022-06-06) Abebe Wubetu; Mekonnen Bersisa (PhD)
The issue of environmentally induced migration and displacement is a significant part of a significant policy debate internationally. In Ethiopia, little attention has been given to policy alternatives with regard to environmental degradation, although the severity of human life associated with environmental problems has shown a dramatic increment over the last couple of years. This paper aims to analyze the impact of the environment on both internal and international migration stocks. Coefficients of explanatory variables that have an impact on internal migration were estimated using static panel data models such as random effects regression. The SYSTEM GMM estimation technique was applied to a gravity model of international migration over the years 2000 to 2020. Based on the stata regression results, some of the environmental variables were found to have a significant effect on both internal and international migration. While standardized precipitation, sudden-onset hazards, slow-onset hazards, and conflict have a significant correlation with internal migration, we could not find any significant association between temperature anomalies and internal migration. The pooled OLS regression results of the gravity model showed that the sudden-onset hazards ratio, slow onset hazards ratio, distance, GDP ratio, amenity index ratio, and political risk ratio had a significant relationship with international migration. Based on the Arellano-Bover/Bond estimation technique, distance, and GDP ratio(the two major gravity variables), slow-onset hazards ratio, amenity index ratio, air pollution exposure, and political risk index turned out to be significant. However, the effect of population ratio, unemployment ratio, and rainfall anomaly index on international migration stock was not significant.

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