Using the Tobin Q model to evaluate the impact of credit risks on the bank’s market value during the corona pandemic
Journal of Islamic Accounting and Business Research
ISSN: 1759-0817
Article publication date: 19 May 2023
Issue publication date: 15 August 2023
Abstract
Purpose
This paper aims to assess the impact of credit risk on the market values of private banks during the corona pandemic.
Design/methodology/approach
This study is identifying critical issues of credit risk at six great private banks. A conceptual framework is designed based on the Tobin Q model for investigating study hypotheses. Quantitative financial analysis methods have been used for processing data, such as financial ratios, arithmetic mean and multiple linear regression.
Findings
The most important result of this study is the lack of influence of credit risk on the market value of selected banks. Because the dimensions of credit risk have critical importance in increasing or decreasing the market value, these banks must continue to adopt quantitative financial analysis to measure credit risks to avoid their risk.
Originality/value
This study elaborates the need for financial indicators to help assess the market value of banks during the economic crises caused by the closure of commercial institutions during the corona pandemic. There is continued increase in bank credit to support these institutions, borrowers and cash withdrawals, which may affect their market reputation.
Keywords
Acknowledgements
The researchers express their thanks and appreciation for the support of the bank’s administration for this study.
Funding: Yes, there is no financial support for this study from any government or/and private agency.
Citation
Mkalaf, K.A. and Hilo, S.H. (2023), "Using the Tobin Q model to evaluate the impact of credit risks on the bank’s market value during the corona pandemic", Journal of Islamic Accounting and Business Research, Vol. 14 No. 6, pp. 973-988. https://doi.org/10.1108/JIABR-08-2022-0201
Publisher
:Emerald Publishing Limited
Copyright © 2023, Emerald Publishing Limited