Faryal D., Tikhomirov A.F.
INVESTIGATING THE IMPACT OF MARKET SHARE ON PROFITABILITY OF AFGHAN BANKS *
Аннотация:
this study and the profitability of commercial banks, our government from regression compilation. The effect of fixed and random effect in the case of five commercial banks, the state government of Afghanistan from 2015 to 2019. The results show that internal factors, etc., measured by Size, Share, etc. significantly affect the profitability of banks affects. State-owned banks of larger sizes share higher profitability than other banks. The profitability of banks reduce GDP leads to greater profitability, commercial, government to be the bank in Afghanistan, the results we get an insight into the profitability of commercial banks, the state offers, due to the latest changes in the banking industry of Afghanistan
Ключевые слова:
SHARE, Profit, ROA, ROE, ROS
УДК 33
Faryal D.
Master student
Peter the Great St. Petersburg Polytechnic University
(St. Petersburg, Russia)
Scientific supervisor:
Tikhomirov A.F.
Associate Professor
Peter the Great St. Petersburg Polytechnic University
(St. Petersburg, Russia)
INVESTIGATING THE IMPACT OF MARKET
SHARE ON PROFITABILITY OF AFGHAN BANKS
Abstract: this study and the profitability of commercial banks, our government from regression compilation. The effect of fixed and random effect in the case of five commercial banks, the state government of Afghanistan from 2015 to 2019. The results show that internal factors, etc., measured by Size, Share, etc. significantly affect the profitability of banks affects. State-owned banks of larger sizes share higher profitability than other banks. The profitability of banks reduce GDP leads to greater profitability, commercial, government to be the bank in Afghanistan, the results we get an insight into the profitability of commercial banks, the state offers, due to the latest changes in the banking industry of Afghanistan.
Keywords: SHARE, Profit, ROA, ROE, ROS.
Corporate formation followed by the issue of separation of ownership from management, was raised in the late nineteenth and early twentieth centuries globally. Considering the issue of optimal performance in the current form, it was first raised in the 1990s in the UK, the United States and Canada in response to problems related to the efficiency of the company's board decisions. But the financial crisis of recent years led to an emphasis on the relationship market share and profitability of companies in the region and the world. The main factor for the creation of this crisis, the inability of managers in the use of the right opportunities, investment, and the proper distribution of profits between shareholders of the company was. Gradually, the agency said. the public and private sectors found that with the loss of investor confidence to the forecast, cash flow, to the flow of investment to the speed of change and remove the flow of investment and the reduction of financial resources, the company has a sudden collapse of such crises, etc. from a Sue, etc., problems, and challenges the world of collaborative shows, and on the other hand, the importance of having the structures of ownership healthy, institutions financial efficiently, rules, banking transparent, accounting standards, etc. Financial regulation, efficient, and access detailed information. They are timely. All of these indicate negative consequences of relationship-based activities compared to market activities.
The profitability of any occupation is an important and vital factor for survival. The rights of employees, the resources required to provide and provide services and shareholder satisfaction are all derived from the profit of business activities. For a while, due to a lack of resources for the provision of services quality, and to distinguish the target market, especially in competitive conditions, loss of the dedication of the staff and the support of shareholders, trade on the verge of collapse will be placed. However, you can get one of the most important indicators to assess the performance and success of companies and managers, business to increase market share is tied.
In the review, the main factors affecting the profitability of the companies, at least four categories of variables affecting the profitability is listed: the performance of the past, the growth of short duration Co., Ltd. industry growth and activities, the general economy. This study aims to investigate the impact of the above-mentioned factors on the profitability of Afghan companies.
2.1International Empirical Research
A common myth among marketers is that market share is the key to profitability. If this myth were to be true, in recent years General Motors would have to be the world's most profitable car company, United the largest airline, and Philips the largest electrical products company. In fact, although these companies are market leaders due to higher sales volume, they are losing in terms of profitability. The source of this myth, regardless of this example, is the observed correlation between market share and profitability. As every student knows the statistics, the correlation between the two variables does not necessarily indicate a causal relationship between them. A plausible justification for the correlation between market share and profitability could be that both of these variables, namely higher market shares and higher profitability at the same time, originate from the same source. And this resource is a sustainable competitive advantage in meeting customer needs more effectively and efficiently. When a company has a competitive advantage, it can achieve a higher profit margin through lower premium discounts or lower production costs. This competitive advantage, if sustained, also discourages other companies from targeting the company's customers and can even effectively resist their development efforts. As a result, however, a less fortunate company may similarly face efficient competitors who can gain more market share at a very competitive rate (by sacrificing profit margins). A company with a sustainable competitive advantage can still maintain a larger market share while being more profitable. [11]
Market share is not really a key to profitability but another output of an efficient company. Unfortunately, when the management does not understand the signs of a weak strategy (insufficient and declining market share) as the cause and tries to deal with it with inappropriate tools such as rate-breaking, the expected profit of the company is not achieved. In contrast, the rapid move to gain market share without a particular competitive advantage usually reduces the profitability of the company and the industry. The ultimate goal of a strategic plan should not be to acquire or maintain sales, but to build and maintain the company's competitive advantage is a priority. Profitability, and in many cases market share, arises spontaneously despite a sustained competitive advantage. In fact, contrary to the myth that higher market share leads to higher profitability, changes in profitability usually precede and include changes in market share. Wal-Mart's competitive advantage, for example, made it the most profitable retailer, long before it became the largest retailer in the United States; While the low profitability of C-Years has been achieved by the company's declining market share over the years. Such a pattern of changes in profitability as a cause and not a consequence of changes in market share can be seen similarly in the automotive, steel and banking industries. [4] A strategic plan based on sales instead of creating a competitive advantage is a so-called "poor neighbor" strategy, and a negative total game that will ultimately erode the industry's profitability. Each percentage of market share gained by reducing profit margins (either by offering a lower price or by imposing a higher cost) always reduces the value of sales made. Given that competitors can also effectively retaliate, they are also likely to reduce at least part of the sales profit, which in turn will reduce the profit margin in the market. However, being better may end up being bigger. Such positive overall competition perpetuates the industry instead of undermining its profitability. These strategies attract more customers by creating more value (without increasing the price too much) or more efficiency (reducing costs without reducing the value offered). As a result, this source of profitable growth can be called a competitive advantage because competitors cannot easily and in a short time imitate it, or if they can, this copying is possible at a high cost. [8]
Many managers do not fully understand the concept of competitive advantage and its importance for long-term profitability. It is often said that they see a competitive advantage in having more stores and branches than competitors, more smart sellers or higher quality, while none of this is a competitive advantage unless these competencies and resources enable the company. To provide more value to the customer more efficiently than competitors. Offering more attractive offers to the customer due to lower profit margins may be an advantage in sales, but it will certainly not be a sustainable competitive advantage. [10]
In a study about the sales productivity in the life insurance the growth and profitability of the market in Germany, the influence of size on the growth and profitability of insurance companies in the period 2011 to 1998 to analyze. Research findings showed 3 Effect 2, the insurance, the average temperature exposed to the phenomenon of "satisfaction average" are, etc., which means that growth and profitability, they are not average. Small insurance companies have been able to achieve high growth in the past. This growth, which followed the financial crisis was done to the expense of profitability (sacrifice part of the profit margin) reduce the profitability and the process of their growth in the period 2009-2010 was. Finally, the data showed that large companies at the same time experienced higher market growth rates and profitability. The analysis showed that the growth of profitability in the period under consideration was realized and possible [20]. Other researchers related to the insurance industry, the factors specific non-life insurance companies, etc., affecting their profitability in Turkey to collect data from 24 of the insurance company active in Turkey during the period 2006-2013 were studied in a total of 192 view in Tableau two variables, etc. 4 and another, towards the profitability of the buy 3 was different, that is, the ratio of profitability in the world. based on the experimental results, the factors affecting the profitability of non-life insurance companies in Turkey, including the size of the company, the proportion of damage, etc. of current ratio and the growth rate of insurance premiums [15]. Another study, validation of trade simulation: is high market share linked to high profitability? Market share and profitability studies is that the company's share has a positive effect on the company's profit and money turnover. Zee has a history of activity of more than 3,800 companies that send their information annually. To CE Institute strategic planning, as part of an effort to validation studies, simulations, etc., researchers, market share, and profitability 440 now simulated. 96 industries belonging to two distinct simulation games were tested. The results confirmed a positive and significant relationship between the two variables, although the intensity of the relationship was not as expected [12].
Many economists believe that entrepreneurship is one of the fundamental factors of economic development and growth in the modern economy. [2]. Most companies worldwide are SME and are recognized worldwide as the engine of economic growth. Doh and Kim define SMEa as an important part of the global economy, providing resources for the newest jobs and innovations [1]. One of the main problems of increasing activity of small jobs in Russia at the current stage of development is the lack of working capital for small and medium-sized jobs. Lack of access to funds is considered the main reason for the low-functional SME sector [7]. In this mode, while firm, BIG, especially in times of economic crisis, for a small company with liquidity problems are facing, although you can still without profitability survive, but the lack of its ability to perform the obligations of the liquidity of the short term, the death sentence is [6].
Due to increasing competitiveness, the main objective of companies is to formulate strategies in such a way as to reach the highest level of performance leading to profitability. The relationship between market share and profitability is one of such phenomena is that in literature, trade policy, more attention and studied. Although decades, from the first report studies the past, is going to have a positive relationship between market share and profitability has been reported [18], but the nature of this relationship is still very much be taken into consideration [14].
2.2 History of Banking in Afghanistan
The high cost of labor and the competitiveness of the business environment in the 1960s, like banking, forced some of its operations to be automated. Telephone banking, the use of personal computers, and cable television networks are among the methods that have attracted the attention of banks. ATMs (the most important change in the automation of banking services). Barclays Bank was the first bank to purchase ATMs and the first automated teller machine in 1967. At first, ATMs were not very advanced, they were just cash suppliers, and banks that used ATMs performed better than their competitors. In the mid-1970s, features such as account balance questions and deposits were added to ATM capabilities, as was the advantage for ATM cardholders. In this way, customers can do most of their joint transactions without going to the bank branch. ATMs gradually became more popular with customers in the late 1970s. Thus, most banks considered ATMs a prerequisite for staying in business. In the late 1980s, ATMs were a public service that had no competitive advantage. So to get. Banks were successfully looking for a new way to provide services. So internet banking attracted the attention of people and especially business who hoped to expand their market in 1993 so the foundation of internet banking was laid. Thus, the banking industry entered the service phase in a fundamental change at any time and place. In 1994, banks used the Internet as an electronic system to offer their services and products. This method provides less cost per process than branch banks. Most developed countries now provide timely banking services to customers. These people can do most of their banking work 24 hours a day, without the need for a physical presence in the bank. Gradually when internet banking becomes a regular service, banks start to differentiate their internet offers.
E-banking means the integration of all the activities of a bank through new information and communication technology based on banking processes with changes in the organizational structure of banks, which allows providing all the services required by customers. In other words, electronic banking is going to use advanced technology, communication tools, and telecommunications networks to transfer funds.
Table 1 - Comparison between electronic and traditional banking
|
Traditional banking |
Electronic banking |
|
Limited market |
Unlimited market in terms of location |
|
Competition between banks |
Brand competition |
|
Providing limited services |
Provide unlimited services |
|
Provide services in a specific way |
Provide a variety of services based on customer needs |
|
Rely on branches |
Banks equipped with electronic facilities |
|
Focus on cost |
Focus on cost and revenue growth |
|
During office hours |
In terms of time, unlimited, 24/7 |
|
Lack of close and related relationship between banks |
Existence of close and close interbank relationship |
|
Due to the paper-based structure, huge amount of HR |
Human resources are greatly diminished. |
Today, mobile banking has become a global phenomenon because most bank customers have mobile phones and are constantly using them for many other purposes instead of communicating with other people. The Juniper Research Foundation predicted that in 2012 global mobile payments reached 8.88 billion, including 3 39 billion which includes small payments.
However, Europe has a decent infrastructure for mobile communications and comprises 80% of the necessary infrastructure for mobile banking services. The rise in fixed rates and low internet has encouraged bank customers to use internet channels due to the current situation; the same trend is expected for mobile channels as well. Among the European countries, we have chosen Germany and will talk about the situation of mobile banking in this country. With 50 million mobile users, Germany has the largest mobile market in Europe. In the European banking industry, there are more than 2,200 financial institutions, which make up 30% of the European financial institutions. In other words, there are about 60 bank branches in Germany for every 100,000 people.
In other European countries, such as the United Kingdom, Finland, Ireland, and Sweden, the yen has a maximum of 25 branches. Currently, out of 100 large banks, only 14 banks offer mobile banking services to their customers. These services are available through the operator. T-Mobile, Vodafone, E-Plus, E2 are the four big companies in this field. By 2010, the number of users of the global standard mobile phone (third generation mobile technology) was 17.7 million, which is expected to more than double by 2020. Most banks have chosen a multi-channel strategy to engage with their customers, as well as offering traditional ATM branches and services in addition to Internet banking and mobile banking. Such an approach is called channel expansion. Japanese banks are increasingly offering mobile phones as a cost-effective channel for banking services in recent years. In technologically developed countries such as Korea, Singapore, Hong Kong, and Japan, the use of the mobile phone market is 40% complete, and customers have access to these personal communication tools and are quite successful in financial services. Millions of transactions are made through mobile phones every day, which creates huge marketing opportunities for banks. Compared to Korea, where more than 70% of the 48 million population of one or more mobile devices, the wireless infrastructure of many Japanese countries is at its infancy. Currently, in Afghanistan, mobile banking services are weak for various reasons including poor infrastructure and telecommunications, lack of internet connection, legal, cultural, administrative rules, and so on. Therefore, it is not entirely possible to do this in a short time. Afghan banks use mobile phones to advertise and check their account balances, and more recently to pay for electricity, water and other bills, all through a simple text message.
In this part of the research, the researcher is analyzing the data collected by the questionnaire using Excel program. The first step is to identify each of the banks and telecommunications companies, and then in the next step, the resulting data are analyzed separately. Banks and telecommunications companies are willing to cooperate with the researcher and offer mobile banking Customer service: The number of these banks and telecommunication companies that have agreed to cooperate with the researcher is not completely, including 13 banks and 9 telecommunication companies. Banks and telecommunications companies that want to cooperate but do not provide mobile banking services to their customers: The reason why these telecommunication companies and banks could not provide us with the necessary information was the lack of electronic banking services in their industry. The number of these banks and telecommunication companies that do not have electronic banking services reaches seven. Banks and telecommunications companies that refused to cooperate.
Banks and telecommunications companies that refused to cooperate: The reasons for the impossibility of cooperation of some banks and telecommunication companies may have been not having enough time, not having this new technology in the relevant industry, and finally not having mobile banking services in their industry. The number of these banks and telecommunication companies reaches four. Thus, the statistical sample that the researcher was able to research in the field of infrastructure has been reduced to 9 and the data and results have been analyzed based on these 9 companies.
The researcher first explains the familiarity of banks and telecommunication companies with the types of services provided in Mobile Banking and in the next step about those banks and telecommunication companies that are providing mobile banking services in Afghanistan.
Figure 1- Fields for using mobile banking services
Investigate the relationship between market share and profitability in Afghanistan's banks. As a result, we have a regression model, which shows us the link between profitability and market share chosen based on the review of our literature and factors of assumptions. As the hypothesis of the original content, we have a hypothesis on this is that we significant changes in indices that profitability (ROA, ROE, ROS and SHARE), apart from the market is there to confirm or reject the hypotheses, we model that we created.
2.3. Selection of Variables and Hypotheses
This research has two categories of dependent and independent variables. Return on equity or return on assets is a scale to measure profitability that this ratio calculates the return on assets used as follows and is considered as a dependent variable.
Asset return rate = net profit (after sales tax)/ total assets
The number of independent variables in this study is four, which include industry growth, company growth, index the general activities of the economy and the past performance of the company. But since these 4 variables cannot be measured straight.
Past market share: The market share variable in the present study is divided by the total unit sales market sales are obtained. Similarly, the market share variable exceeds the average market share the last four years are measured up to the current year.
Return on assets of the last four years: This index is also from the average rate of return on assets of four years ago this year is obtained.
Production growth: In this study, this index by calculating the four-year growth rate in the company's products is calculated. Marketing Growth: A measure of how much a company spends on its marketing department. In this study, this indicator is obtained by calculating a four-year growth rate in the company's marketing costs. Price growth: In this study, this index by calculating the four-year growth rate of product prices the company is obtained. By yield growth: This index is measured by the average ROE change of the current year of all companies available in the database of this research. Average production growth: This index is also measured by measuring the average change in production this year database companies are obtained in each industry group. Industry growth: In this study, this index is calculated through the five-year growth rate of all products in each industry group. How to analyze data: After collecting and classifying the data, in this study to test the hypotheses in the first step using Correlation matrix, the correlation between the variables is investigated and in the next step with the structural equation modeling method, an appropriate structural model has been designed for each of the observed and independent variables. In this research to examine the research hypotheses, correlation matrix and structural equation model has been used. And the calculation will be done by the software.
Table 2 - introduces the independent variables along with their measurement criteria as follows.
Table 2 - Introduction of research variables
|
No |
Variables |
Measurements |
Supported studies |
|
1 |
Past performance |
(1) Average market share of the last four years (2) The average return of the last three years (3) The average return is four years |
Marzieh Atraki 1389 |
|
2 |
Short-term growth of the company |
(1) Market share growth (2) Marketing growth (3) Production growth |
Ailawadi, K.L., P.W. Farris and M.E. Parry (1999) [2] |
|
3 |
General activities of the economy |
(1) Price growth (2)Average ROI growth (3)Average production growth |
Whittington, G. (1980) [8] |
|
4 |
Industry growth |
(1) Industry growth |
Shepard, W.G. (1972) [18] |
|
5 |
Profitability |
(1) Return on assets (2) Return on equity (3) Return on Sales |
Buzzell, Gale and Sultan, 1975) [19] |
|
6 |
Firm size |
Large- small (medium firms) |
Jacobson and Aaker (1985) [17] |
|
7 |
Income |
(1) Cash |
Defond.M (2003) [17] |
|
8 |
Growth trend |
(1) Net Sales Revenue Trend (2) Net Income Trend |
Marzieh Atraki 1389 |
|
9 |
Management |
(1) Market Capitalization (2) Total assets (3) Current assets |
Marzieh Atraki 1389 |
This study is based on a panel data set covering thirteen Afghan banks. The variables used in the model are calculated using the original data collected from the annual financial reports. Thirteen state-owned commercial banks of Afghanistan in the period 2015-2019. We chose private and state-owned commercial banks, since there is no research to determine the determinants of commercial banks' profitability comes from official Afghan National Statistics Office data set. Azizi Bank, Maiwand Bank, Arian Bank, Bakhtar Bank, Gazanfar Bank, Afghan United Bank, First Microfinance Bank, International Bank of Afghanistan, Commercial Bank of Afghanistan, Al-Fallah Bank, Barak Bank, Habib Bank Limited, Standard Chartered Bank (13 in total) are the Necessary Data Taken from the Central Bank of Afghanistan and the Ministry of Finance. The use of panel data is the most appropriate tool when the sample becomes a combination of cross-sectional data and time series. A multiple regression model is constructed for analysis. Panel data set and identification of key determinants that affect corporate profitability the contents of the model banks of Afghanistan are as follows.
Equations:
SHARE = cons + a * Cash + b * CA + c * ROA + d * NIT + d*MC + e*NSRT + f *ROE + g *IG + h * PQ + i * SIZE + j* ROS + k * TA + k*PG + l *Profit (1)
4.1. Descriptive Statistics
The remaining variables are some. To get more detailed information about the data, we need to use the tabular call command with descriptive statistics (summary). The results are shown below in Figure 2.
Figure2: Detailed description of variables
The exact description of the variables shows us the main meaning of each variable. For example, ROA has minimal and maximum meanings, and we find that there is a large scale that leads to the possibility of dispersion.
In order to see if there is a connection between the proposed variables, we need to create a correlation matrix, which is presented in Figure 3.
Figure3 - Correlation matrix
We built Pearson's linear correlation coefficient. Therefore, it works only if there are linear relations between variables. In the form of a relationship between profit and market share there is a strong relationship. The connection between TA and CA is very weak. No other severe dependencies can be defined. If the relations are nonlinear, the Pearson correlation coefficient values may be incorrect.
4.2. Regression Results
The next stage is the construction of the regression model with the main data and without any changes. The regression table is presented in Table 3 below.
Table 3 – Regression results for SHARE
|
|
POOL |
|
RE |
|
FE |
|||||||
|
|
b |
|
Sig. |
b |
|
Sig. |
b |
|
Sig. |
|||
|
|
(se) |
|
Level |
(se) |
|
Level |
(se) |
|
Level |
|||
|
Profit |
1.68 |
|
**** |
1.68 |
|
**** |
0.65 |
|
**** |
|||
|
|
(0.00) |
|
|
(0.00) |
|
|
(0.00) |
|
|
|||
|
CA |
0.66 |
|
0.66 |
|
0.02 |
|
|
|||||
|
|
(0.04) |
|
|
(0.04) |
|
|
(0.04) |
|
|
|||
|
ROA |
0.02 |
|
**** |
0.02 |
|
**** |
0.04 |
|
**** |
|||
|
|
(0.45) |
|
|
(0.45) |
|
|
(0.45) |
|
|
|||
|
MC |
-2.23 |
|
*** |
-2.23 |
|
*** |
-2.23 |
|
* |
|||
|
|
(0.21) |
|
|
(0.21) |
|
|
(0.78) |
|
|
|||
|
NIT |
-13.67 |
|
-13.67 |
|
1.63 |
|
** |
|||||
|
|
(0.34) |
|
|
(0.34) |
|
|
(0.53) |
|
|
|||
|
NSRT |
0.58 |
|
0.58 |
|
0.01 |
|
** |
|||||
|
|
(0.23) |
|
|
(0.23) |
|
|
(0.21) |
|
|
|||
|
ROE |
0.01 |
|
**** |
0.01 |
|
**** |
0.01 |
|
**** |
|||
|
|
(0.41) |
|
|
(0.41) |
|
|
(0.41) |
|
|
|||
|
IG |
-0.02 |
|
|
-0.02 |
|
-0.04 |
|
|
||||
|
|
(0.14) |
|
|
(0.14) |
|
|
(0.14) |
|
|
|||
|
PQ |
-5.71 |
|
*** |
-5.71 |
|
*** |
-5.71 |
|
*** |
|||
|
|
(0.45) |
|
|
(0.45) |
|
|
(0.45) |
|
|
|||
|
CASH |
0.54 |
|
**** |
0.54 |
|
**** |
0.54 |
|
**** |
|||
|
|
(0.03) |
|
|
(0.03) |
|
|
(0.03) |
|
|
|||
|
SIZA |
0.36 |
|
0.36 |
|
0.58 |
|
|
|||||
|
|
(0.01) |
|
|
(0.01) |
|
|
(0.01) |
|
|
|||
|
ROS |
0.79 |
|
**** |
0.79 |
|
**** |
0.75 |
|
**** |
|||
|
|
(0.04) |
|
|
(0.04) |
|
|
(0.04) |
|
|
|||
|
TA |
-19.98 |
|
|
-19.98 |
|
-12.34 |
|
|
||||
|
|
(0.25) |
|
|
(0.25) |
|
|
(0.32) |
|
|
|||
|
PG |
0.97 |
|
**** |
0.97 |
|
**** |
2.1 |
|
**** |
|||
|
|
(0.06) |
|
|
(0.06) |
|
|
(0.02) |
|
|
|||
|
_cons |
0.84 |
|
**** |
0.84 |
|
**** |
0.29 |
|
**** |
|||
|
|
(0.13) |
|
|
(0.13) |
|
|
(0.33) |
|
|
|||
|
r2_a |
|
0.8 |
|
|
0.81 |
|
|
0.81 |
|
|||
|
r2_a |
|
|
|
|
0.82 |
|
|
0.84 |
|
|||
|
r2_a |
|
|
|
|
0.9 |
|
|
0.73 |
|
|||
|
r2_a |
|
|
|
|
65 |
|
|
0.09 |
|
|||
|
N |
|
65 |
|
|
5 |
|
|
65 |
|
|||
|
N_g |
|
|
|
|
|
|
|
5 |
|
|||
*P<0.1, ** P<0.01, *** P<0.001, **** P<0.0001
As a result, such an equation appears:
Regression detection is performed to test the compatibility of FE models. Regression modeling assumptions The results of the FE model, presented in Table 3, are generally consistent with these assumptions. They are homosexuals. The boys' cross-sectional independence test shows that there is no cross-sectional correlation in the residuals. Wooldridge test for auto-correlation in panel data shows that we can not reject null. Shapiro - The Wilk test for normal data shows that we can not deny that the residuals are empty.
Table 3 presents three types of regression results for SHARE. The sample is composed
From 65 views for 13 banks. The fixed effect (FE) model for SHARE Afghanistan is preferred. The result of the Hausman experiment is the explanatory power of the fixed-effect model, R-squared,
It is at a satisfactory level of 0.73. The standard regression error is 0.22. Not every one
Coefficients at the 5% level in regression are significant for Afghanistan's banking market share.
In this study. Our data set was based only on Afghan data. Therefore, our results cannot be generalized to other countries.
The aim of this paper was to investigate the relationship between market share and profitability in Afghanistan's banks. As a result, we have a regression model, which shows us the link between profitability and market share chosen based on the review of our literature and factors of assumptions. As the hypothesis of the original content, we have a hypothesis on this is that we significant changes in indices that profitability (ROA, ROE, ROS and SHARE), apart from the market is there to confirm or reject the hypotheses, we model that we created. To confirm or reject the hypotheses, we model that we created, and it is under testing and analysis below we put:
1.also, the graphics of the values of the lever were made and observations was found that the values of the leverage it from the critical value, it is exceeded. The Cook interval analysis also presented similar results with previous analyses. Dfbeta values are intended for each index. Based on the remaining analysis, it was decided that some companies would exclude the model that does not meet the vital values.
For several decades, managers, professors, consultants, and superiors have learned that high market share with high profitability along. According to the economy of scale and experience theory, the cost position of the company depends on its market share. The larger the market share, the lower the unit of business compared to competition and the higher the profitability. The Boston Consulting Group, using relative market share as a measure of power have not used businesses. The results in this paper confirm that market share has a positive impact on the increase in profitability.
The concept of the present study is that the value of market share as a contributory factor to the higher profitability may be in the past exaggerated been, especially during the period of the environment of uncertain and changing. This study also supports the argument, provided that the quality of management, as well as other specific factors of the company and non-company might be important. According to this result, the need to manage scarce resources spent his works toward improving the effectiveness of its practices instead of trying to increase market share at all costs, hoping to improve your profitability of higher market share. The performance depends not so much on market share, but market conditions or industry, the competitive position of the start of a business unit and the strategies adopted by the business managers during the period (Brochet F., Nam. (2008) 4).
The company's share is affected by profitability and I confirm it.
ACKNOWLEDGMENTS
I am grateful to my supervisor, Associate Professor of Peter the Great St. Petersburg University Tikhomirov A.F. for his assistance in working on the article.
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Номер журнала Вестник науки №4 (49) том 1
Ссылка для цитирования:
Faryal D., Tikhomirov A.F. INVESTIGATING THE IMPACT OF MARKET SHARE ON PROFITABILITY OF AFGHAN BANKS // Вестник науки №4 (49) том 1. С. 93 - 113. 2022 г. ISSN 2712-8849 // Электронный ресурс: https://www.вестник-науки.рф/article/5450 (дата обращения: 26.04.2024 г.)
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