Economics at your fingertips  

Oil price shocks and Chinese banking performance: Do country risks matter?

Chi-Chuan Lee and Chien-Chiang Lee ()

Energy Economics, 2019, vol. 77, issue C, 46-53

Abstract: This paper contributes to the existing literature by investigating the impacts of oil prices on bank performance through a broad array of CAMEL (Capital adequacy, Asset quality, Management, Earnings, and Liquidity) indicators in China over the period 2000–2014. To gain further insights into this issue, we also discuss whether the correlations change with different dimensions of country risk, i.e., economic, financial, and political, which extant studies ignored. The results reveal that oil prices have a significant impact on banking performance, as their increase triggers a reduction in banking performance in terms of capitalization, management efficiency, earning power, and liquidity. However, these adverse effects are mitigated by country stability, especially economic stability and political stability. These results are important for policy makers who should be cautious when formulating a strategy for macroeconomic stability. From the managerial perspective, bank managers should consider establishing early warning and response mechanisms on the back of oil price shocks in order to operate under better performance.

Keywords: Oil price shock; Banking performance; CAMEL ratings; Country risks (search for similar items in EconPapers)
JEL-codes: C33 G21 G28 Q43 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-06-04
Handle: RePEc:eee:eneeco:v:77:y:2019:i:c:p:46-53