Saint mary’s university

Table of Contents

content page No.

Acknowledgment V
Abstract VI
List of tables IX
List of figures IX
List of acronyms. X, XI
Chapter one 1

0. 
   Introduction 1
   
1. 
   Back ground of the study 1
   
2. 
   Statement of the Problem 3
   

3. 
   Objective of the Study 4
   
   1. 
      General Objective 4
      
   2. 
      Specific Objectives 5
      
4. 
   Research Questions and Hypothesis 5
   
   1. 
      Research Questions 5
      
   2. 
      Research Hypothesis 5
      
5. 
   Scope and Limitation of the Study 6
   
6. 
   Significance of the Study 6
   
7. 
   Organization of the paper 7
   

Chapter two 8

2. 
   Literature Review 8
   
   1. 
      Theoretical Literature Review 8
      
   2. 
      Empirical Evidence 15
      

Chapter three 20
Methodology 20

1. 
   Research Design 20
   
2. 
   Source and Type of Data 20
   
3. 
   Population and sampling 20
   
4. 
   Model Specification and Variable Description 21
   
   1. 
      Model Specification 21
      

3.4.2 Description of variables 22

5. 
   Data Analysis Method 28
   

Chapter Four 29
Data Presentation, Analysis and Interpretation 29

1. 
   Descriptive Analysis of the Data 29
   

2. 
   Correlation analysis 30
   

2. 
   Choosing Random effect (RE) versus fixed effect (FE) models 30
   

Panel Data Analysis 30

2. 
   Testing assumptions of classical linear regression model (CLRM) 31
   
3. 
   Results of the regression analysis 35
   
4. 
   Discussion of the regression results 37
   

Chapter Five 41
ConclusionandRecommendations 41

1. 
   Conclusion 41
   
2. 
   Recommendation 42
   

Reference 44

List of Figures

Figure 1 Summary of the operational panel regression model 22
Figure 2 distribution of the error term 33

List of Tables

Table 4.1 descriptive statistics of dependent and independent variables… 29

Table 4.2 Correlation matrix among the dependent and independent variables… 30

Table 4.3 Autocorrelation 32

Table 4.4 correlation matrix 34

Table 4.5 regression output for model… 35

List of Acronyms

AIB Awash International Bank BOA Bank of Abyssinia
CC Credit Cap

CLRM Classical linear Regression Model

CPI Consumer Price Index

DB Dashen Bank

EPRDF Ethiopian People’s revolutionary Democratic Front

FD Financial Development

FE Fixed Effect

FEM fixed effect model

GDP Gross Domestic Product

HS Housing Scheme

INF Inflation

LR Liquidity Ratio

MoFED Ministry of Finance and Economic Development

M2GDP Broad money Supply to GDP ratio

NBE National Bank Of Ethiopia

NIB Nib International Bank

NIM Net Interest Margin

NBEB National Bank of Ethiopia Bill

OLS Ordinary Least Square

RE Random Effect

REM random effect model

ROA Return on Asset

ROE Return on Equity

RR Required Reserve

TA Total Asset

TOE Total Operating Expense

WB Wegagen Bank