The Impact of Macroeconomic Factors and Banking Management on Bank Deposit Attraction in Iran: Evidence from the Generalized Method of Moments Panel Approach
Keywords:
Bank deposit, customer club, generalized method of moments (GMM), panel dataAbstract
Given the growth in the number of private banks in Iran over the past decades, competition among banks to attract resources and deposits has increased. To maintain profitability and sustain their position in the banking industry, banks must focus on customer satisfaction and offer services that align with customer needs. Accordingly, and considering the importance of identifying the factors influencing the attraction of bank deposits for decision-makers in the field of banking management in the country, this study aims to identify the factors affecting the attraction of bank deposits in Iran during the period from 2011 to 2022 using the panel Generalized Method of Moments (GMM) approach. The findings of this study indicate that among the macroeconomic factors affecting the attraction of bank deposits, inflation and macroeconomic instability have a positive effect on attracting transactional deposits (including current accounts, savings accounts, and other deposits) but a negative effect on attracting investment deposits (including long-term and short-term investments). Meanwhile, national income and interest rates have a negative effect on transactional deposits and a positive effect on investment deposits. Furthermore, among the banking variables affecting bank deposit attraction, the quality of electronic services, customer clubs, and the Return on Equity (ROE) of banks have had a positive and significant impact on the growth of both transactional and investment deposits.
References
E. M. Ferrouhi, "Determinants of Bank Deposits in Morocco," MPRA Paper, vol. 79075, 2017.
R. Yudaruddin, "Financial Technology and Banking Market Discipline in Indonesia Banking," Journal of Asia Business Studies, 2024, doi: 10.1108/jabs-05-2022-0174.
A. Tarawneh, A. Abdul-Rahman, S. I. Mohd Amin, and M. F. Ghazali, "A Systematic Review of Fintech and Banking Profitability," International Journal of Financial Studies, vol. 12, p. 3, 2024, doi: 10.3390/ijfs12010003.
M. Soleymani, A. Rousta, and F. Asayesh, "Presenting a Content Marketing Process Model in the Iranian Banking Industry (Case Study: Bank Mellat)," International Journal of Innovation Management and Organizational Behavior (IJIMOB), vol. 4, no. 1, p. Serial Number 14, 2024, doi: 10.61838/kman.ijimob.4.1.7.
K. Abera Terefe, "Factors Affecting Deposit Growth of Commercial Banks in Ethiopia," St. Mary's University School of Graduate Studies, 2019.
E. Ziramba, "Modeling Private Savings Behavior in A Small Open Economy: An Autoregressive Distributed Lag (ARDL) Approach," International Review of Research in Emerging Markets and the Global Economy (IRREM), vol. 1, no. 3, pp. 453-473, 2015.
O. E. Nathanael, "Macroeconomic Determinants of Bank Deposits in Nigeria," Journal of Economics and Sustainable Development, vol. 5, no. 10, pp. 49-58, 2014.
F. Morina and O. Rufi, "The impact of macroeconomic factors on the level of deposits in the banking sector, an empirical analysis in the Western Balkan countries," Journal of Accounting, Finance and Auditing Studies, vol. 5, no. 3, pp. 16-29, 2019, doi: 10.32602/jafas.2019.28.
I. N. Yakubu and A. H. Abokor, "Factors determining bank deposit growth in Turkey: an empirical analysis," Rajagiri Management Journal, vol. 14, no. 2, pp. 121-132, 2020, doi: 10.1108/RAMJ-05-2020-0017.
A. A. Farhangi, H. R. Bahrami, and H. Zare, "Examining the Impact of Electronic Banking Services on Increasing Bank Mellat's Resources in Lorestan Province," Journal of Development and Transformation Management, vol. 21, pp. 61-68, 2015.
T. Pourmand Bakhshayesh and Z. Pourmand Bakhshayesh, "Examining Factors Affecting Deposit Attraction with Emphasis on Credit Risk and Market Risk in Iran," Monetary-Banking Research Quarterly, vol. 10, no. 34, pp. 681-708, 2017.
