ORCID
Qamarullah Bin Tariq Islam 0000-0003-1165-9516
Abstract
This paper analyzes the causal relationship between liquidity and profitability for public and private commercial banks in Bangladesh. The augmented Dickey-Fuller test of stationarity is carried out first. As they are found to be integrated of the same order, the Engle-Granger test of cointegration is applied. Finally, the Granger causality test is applied to check if there is any causal relationship between liquidity and profitability for public and private commercial banks in Bangladesh from 2001 to 2019. Another aim of the paper is to see if there is any difference in the causal relationship between these two bank typologies. The results show that there is unidirectional causality from profitability to liquidity for public banks while no causal relationship is evident for private commercial banks in Bangladesh. The findings further confirm that different bank typologies behave differently in Bangladesh and hence policy makers should keep this in mind during policy formulation.
Recommended Citation
Bin Tariq Islam, Qamarullah
(2024)
"Causal Analysis Between Liquidity and Profitability:
Is There Any Difference Between
Public and Private Commercial Banks in Bangladesh?,"
Journal of Banking and Financial Economics: Vol. 2020:
No.
14, Article 3.
DOI: 10.7172/2353-6845.jbfe.2020.2.3
Available at:
https://press.wz.uw.edu.pl/jbfe/vol2020/iss14/3
First Page
38
Last Page
46
Page Count
9
Received Date
2 September 2020
Revised Date
16 November 2020
Accept Date
4 December 2020
Online Available Date
29 December 2020
DOI
10.7172/2353-6845.jbfe.2020.2.3
JEL Code
C32; E58; G21
Publisher
University of Warsaw