Table 5 Influence of Digitalisation on the Efficiency of Pakistan’s Banking Industry.

From: Analysing the impact of digital technology diffusion on the efficiency and convergence process of the commercial banking industry of Pakistan

  

(1)

(2)

(3)

(4)

(5)

  
  

OLS

FE

RE

TOBIT

Two-step DPDSYS-GMM

Decision Tobit Model

Decision Two-step DPDSYS-GMM

Hypothesis

Variables

EFF

EFF

EFF

EFF

EFF

  
 

\({{\rm{EFF}}}_{{\rm{i}},{\rm{t}}-1}\)

    

0.3069*** (0.0648)

  

Digitalisation Factor

H1b

IBTR

1.66e05** (4.01e−06)

1.12e−05* (6.04e−06)

1.07e−05* (5.70e−06)

1.69e−05** (6.50e−06)

9.85e−06* (7.43e−06)

Accepted

Accepted

Bank-Specific Control Factors

H2a

NIM

0.7259** (0.2933)

1.0517** (0.3063)

0.8008** (0.2895)

0.8003** (0.2912)

−0.0248 (0.5139)

Accepted

Rejected

H2b

ROE

0.0044 (0.0027)

−0.0002 (0.0025)

0.0012 (0.0025)

0.0009 (0.0025)

0.0017 (0.0013)

Rejected

Rejected

H2c

ROA

0.2498*** (0.0681)

0.4994** (0.1463)

0.2868** (0.0983)

0.3302** (0.1072)

0.1307** (0.0550)

Accepted

Accepted

H3

CIR

0.0002** (8.49e−05)

0.0002** (8.33e−05)

0.0002** (7.99e−05)

0.0002** (7.97e−05)

−0.0004 (0.0006)

Rejected

Rejected

H4

CAPT

0.0002*** (5.27e−05)

−6.6e−05 (0.0002)

0.0002** (8.20e−05)

0.0002** (9.45e−05)

0.0001 (0.0001)

Accepted

Rejected

H5

AGE

0.0007** (0.0002)

−0.0017 (0.0087)

0.0004 (0.0003)

0.0005 (0.0004)

0.0004 (0.0003)

Rejected

Rejected

H6

SIZE

0.0524*** (0.0048)

0.0806*** (0.0111)

0.0647*** (0.0068)

0.0698*** (0.0080)

0.0367** (0.0108)

Accepted

Accepted

 

SCBs

0.1403*** (0.0329)

 

0.1314** (0.0502)

0.1566** (0.0564)

0.0833** (0.0353)

  
 

PSBs

0.0973** (0.0330)

 

0.0818* (0.0493)

0.0914* (0.0547)

0.0627* (0.0323)

  
 

SPBs

0.0745** (0.0302)

 

0.0971** (0.0472)

0.1206** (0.0540)

0.0603* (0.0355)

  

Macroeconomic Control Factors

H7

INFRATE

0.0042** (0.0020)

−0.0163 (0.0226)

−0.0178 (0.0192)

−0.0216 (0.0194)

0.0021 (0.0019)

Rejected

Rejected

H8

INTRATE

0.0078 (0.0048)

0.0279 (0.0314)

0.0298 (0.0277)

0.0359 (0.0280)

0.0085** (0.0032)

Rejected

Accepted

H9

GDPGR

0.0129*** (0.0032)

0.0054 (0.0054)

0.0052 (0.0055)

0.0060 (0.0055)

0.0109** (0.0033)

Rejected

Accepted

 

\({\rm{YEA}}{{\rm{R}}}_{{\rm{DUMMIES}}}\)

YES

YES

YES

YES

YES

  
 

Constant

−0.5802*** (0.1012)

−0.9598* (0.5039)

−0.8246*** (0.1796)

−0.9769*** (0.1974)

−0.3588 (0.2545)

  

R2

0.5964

      

adj. R2

0.5717

      

Overall R2

 

0.3501

0.5874

    

Arellano-Bond AR(1) Test in first differences

  

−3.73

  

Pr > z

    

0.000

  

Arellano-Bond AR(2) Test in first differences

  

0.67

  

Pr > z

    

0.506

  

Sargan Test of Overid. Restrictions

   

1.55

  

Prob > \({\chi }^{2}\)

    

0.213

  

Hansen Test of Overid. Restrictions

   

0.99

  

Prob > \({\chi }^{2}\)

    

0.320

  

Wald \({\chi }^{2}\)

   

228.33***

37611.38***

  

No. of Instruments

    

27

  

No. of observations

435

435

435

435

406

  

Number of Banks

29

29

29

29

29

  
  1. EFF banking efficiency estimated using bootstrap data envelopment (DEA) analysis in the 1st stage, \({{\rm{EFF}}}_{{\rm{i}},{\rm{t}}-1}\); first lag of banking efficiency, IBTR internet based transactions, NIM net interest margin ratio, ROE return on equity ratio, ROA return on assets ratio, CIR cost-to-income ratio, CAPT equity to assets ratio, AGE bank age measured in years, SIZE measured as natural logarithm of total assets, SCBs state-controlled banks = 1 otherwise = 0, PSBs; private sector banks = 1 otherwise = 0, SPBs; special purpose banks = 1 otherwise = 0, INFRATE; yearly inflation rate, INTRATE; yearly interest rate, GDPGR gross domestic product growth rate. Standard errors are in parentheses.
  2. ***p < 0.01, **p < 0.05, *p < 0.1.
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