The determinants of the number of banks: Empirical results ... - LEAD

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Table 2. Determinants of the Number of Banks(1) (2) (3)VARIABLES nb nbnbsize 0.299 1.125* 1.033*(0.798) (0.613) (0.594)age -0.695 -1.407 -1.198(1.129) (0.877) (0.855)lc -1.329 -3.460* -3.120(3.028) (1.996) (1.938)leverage 0.131 -0.484 -0.344(0.831) (0.642) (0.624)liquidity -0.597 -0.627* -0.686**(0.408) (0.347) (0.337)flexibility 0.00187 -0.00785 -0.00572(0.0176) (0.0137) (0.0133)profitability -17.12 -26.63** -20.50*(12.89) (10.46) (10.62)rat 5.504** 3.333*(2.361) (1.787)durat0 0(0)durat1 3.377(3.677)durat2 -1.824(3.748)durat3 -0.474(3.375)bqp0 1.798(3.380)bqp1 -0.370(3.042)bqp2 0(0)bqp3 -0.229(3.483)grp -3.429* -2.326 -2.267(1.917) (1.621) (1.567)msh0 0 -1.955 -3.678(0) (3.958) (3.935)msh1 4.656 0 0(4.963) (0) (0)msh2 10.15** 5.595** 5.043*(4.432) (2.689) (2.615)msh3 4.273 -0.0884 -0.847(4.005) (2.387) (2.342)mshmg 1.773 -0.648 0.195(2.542) (1.576) (1.589)sc -0.00926(0.0279)Constant -1.470 -4.433 -4.741(15.91) (10.72) (10.36)Observations 45 48 48R-squared 0.586 0.465 0.515Robust standard errors in parentheses*** p
Regression (1) exposes results concerning all variables. The variable representing Firm‟ssize measured by the variable (SIZE) is no significant and has a positive impact on thenumber of banks. On the other hand, coefficients of the variable measuring firm‟s age(AGE) and legal structure (LC) do not present a level of significance to confirm that mostinformational opaque firms should be characterized by a reduced number of banks.However, the variable (Grp) is significant and has a negative effect on the number ofbanks. It appears that firms pertaining to a group have a reduced number of banks. Thisresult cannot validate assumption 1. Variable (MSH2) has a significant and a positiveinfluence on the number of banks. In fact, it appears that firms whose share of capital heldby the main shareholder is between 50% and 75% maintain relationships with a highernumber of banks.Concerning the impact of firm‟s quality on the number of banks, results do not validate thefourth hypothesis. The variables Leverage and Flexibility establish a positive and nosignificant link with the number of banks. However, Liquidity and Profitability have asignificant and negative effect on the number of banks.Relating to the second assumption, results show that the duration of the main bank‟srelationship (DURAT) is not significant. While, hypothesis 3 is validated since variable(Rat) influences positively, and to a significant degree the number of banks.Results of Regression (2) show that the variable (SIZE) presents a positive level ofsignificance to confirm assumption 1. However, variable (LC) has a significant and anegative impact on the number of banks. So, the most informational opaque firm shouldincrease its number of banks. Concerning the impact of firm‟s quality, results validate thefourth assumption. (Liquidity) and (Profitability) have a positive and a significant impacton the number of banks. Similarly to the conclusion presented by Degryse and Ongena(2000) and Petersen and Rajan (1994), it proves that most profitable firms arecharacterized by a reduced number of banks.Finally, Regression (3) confirms results. The variable (RAT) establishes a positive and asignificant effect on the number of banks.
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