Determinants of the financial performance of the savings and credit cooperatives of Ecuador
DOI:
https://doi.org/10.25097/rep.n34.2021.07Keywords:
Savings and credit cooperatives, panel data, financial performance, return on assets (ROA), return on equity (ROE)Abstract
The aim of this study is to analyze how the internal, macroeconomic and governance factors affect the financial performance of Ecuadorian savings and credit cooperatives with assets over five million dollars during the period 2010 to 2020, using panel data with fixed effects. The estimation results of the specific variables show that a high profitability is associated with a higher capital ratio, size and diversification, but efficiency, credit and liquidity risk have a negative effect. On the other hand, evidence shows that the impact of GDP growth, inflation and unemployment is negative. Finally, considering the governance indicators, the findings reveal a positive relationship with the governmental effectiveness and regulatory quality, while there is an inverse relationship with the variables of voice and accountability, rule of law, control of corruption and political stability.
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