DETERMINANTS INFLUENCING FINANCIAL PERFORMANCE OF FINANCIAL INSTITUTIONS IN AZERBAIJAN
DETERMINANTS INFLUENCING FINANCIAL PERFORMANCE OF FINANCIAL INSTITUTIONS IN AZERBAIJAN

Summary/Abstract: The purpose of this study is to investigate the financial performance level and factors influencing the performance of financial institutions in case of Azerbaijan over a 3-year period. Return on Assets (ROA) has been used as performance indicator, whereas company size, capital adequacy, liquidity, financial leverage and debt ratios are used as independent variables. As empirical evidence, the sample consists of 43 financial institutions, most of which were banks then credit agencies, investment and insurance companies in the period ranging from 2019 to 2021. In addition, a secondary data of these companies has been utilized. By applying statistical techniques like descriptive statistics and multiple regression using STATA software and financial ratio analysis approach, chosen data set was analyzed for the purpose of data analysis. Estimated results of the research paper indicates that capital adequacy, financial leverage, company size are significant determinants of financial performance in financial institutions of Azerbaijan, while debt-equity ratio and liquidity have a low impact on it.

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