Unraveling the Profitability Puzzle: A Comprehensive Analysis of Banks' IT Adoption in Southeast and Central Europe

Ajtene Avdullahi, Esat A. Durguti, Bese Sadikaj and Milaim Mehmeti

Economic Studies journal, 2025, issue 4, 19-35

Abstract: The purpose of this research paper is to investigate the impact of commercial bank branches (CBBs), automated teller machines (ATMs), the number of debit cards (NDCs), and the number of credit cards (NCCs) on Banks Profitability (BP) in terms of Return on Assets (ROA) and Return on Equity (ROE). The sample used for this research covers the years 2017-2022, respectively 108 yearly observations with a particular emphasis on the eighteen Southeast and Central European countries (SCE). The current research employed panel data, with the econometric strategy that combines ordinary least squares (OLS) and generalized methods of moments (GMM) to examine the premise. The findings indicate that NDCs and ATMs have a negative statistical influence on BP, whereas CBBs and NCCs have positive influences, based on the static approach. Additionally, results obtained from the dynamic GMM approach indicate that ATMs, CBBs, and NCCs positively impact BP, whereas NDCs have the opposite effect. From the perspective of originality and scientific contribution, the research is considered unique in the inclusion of variables and countries in the analysis.

JEL-codes: F43 G21 L26 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bas:econst:y:2025:i:4:p:19-35

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