The Influence of Global Crude Oil Prices on Banking Sector Profitability: Panel Evidence from Selected Economies

Emmanuel Ezekiel Mwanjilinji and Fei-Ming Huang

Asian Journal of Applied Economics, 2025, vol. 32, issue 2

Abstract: This study investigates the impact of global crude oil prices on banking sector profitability in 16 selected economies from 2000 to 2021. Using panel Autoregressive Distributed Lag (ARDL) analysis, the study explores both long-run and short-run relationships, incorporating GDP growth, inflation, and real interest rates as control variables. The results reveal a weak but positive long-term association between oil prices and bank profitability, while GDP growth significantly enhances profitability, and inflation exerts a negative effect. Real interest rates also show a positive influence. In the short run, none of the macroeconomic variables exhibit statistically significant effects. The findings suggest that macroeconomic stability—particularly sustained growth and inflation control—is essential for long-term banking sector performance. Policymakers and financial institutions should consider structural drivers and adopt strategies that enhance resilience to commodity price volatility.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/401162/files/09.Vol32Issue2_p164-187.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:thkase:401162

DOI: 10.22004/ag.econ.401162

Access Statistics for this article

More articles in Asian Journal of Applied Economics from Kasetsart University, Center for Applied Economics Research Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().