Dynamization Analysis of Capital Inflow, Credit Allocation, and Banking Performance using Panel Vector Autoregressive

The direction of globalization and the integration financial system continue to increase, in line with increasing capital flows, which is focus discussion this research. This study applies panel data analysis analyze banking behavior order improve its performance. uses from 1991 2020 39 countries. Return on Equity (ROE) as a measure success operations determined by various interrelated factors. One variables closely related performance share non-financial business loans, inflows entering sector, non-bank sector. Economic that support good are GDP growth, bank concentration, inflation, leverage, efficiency. article Panel Vector Autoregressive capture dynamization, heterogeneity. most exciting results were obtained dividing sample into subgroups, helped researcher understand each regime's different roles transmissions. changes sector will significantly reduce ROE increase leverage for next five periods. imply nowadays, managers should be aware while change very quickly. Bank countries high must always sector—steps management diversifying sources funds efficiently other parties transmission credit channel.