Page 26 - Azerbaijan State University of Economics

Murad Y. Yusıfov: Econometrıc Assessment Of Optımal Interest Burden: Case Study For Azerbaıjan

The study was based on a polynomial regression assessment in which the effects of

the interest burden on bank profits in Azerbaijan. The dummy variable of COVID-19

used in the polynomial model takes into account the lockdown effect. Let us now
consider the econometric assessment of the impact of the interest burden on the profits
of the banking sector for the case study of country (Table 2):

Table 2. Polynomial Regression Assessment of the Relationship between the
Profit of the Banking Sector and the Interest Burden in Azerbaijan
Variable Dependent variable:
Profit of The Banking Sector**
Azerbaijan
c -535,6153
(-2.547774)*
60207,95

(2.633506)
2
-1482026

(-2.424778)*
∗ -15239,3

(-2.404782)
2
∗ 700811,6

(2.272575)*
AR(2) -
-
AR(12) -0.195670
(-1.743196)*
MA(1) -0.947746
(-15.74095)*
MA(6) -
-

R-squared 0.357674
Observations (months) 48
Observations (years)
* t - statistics are shown in bracket.
The notes **, represent the stationarity significance. Test shows that, the first
differences of all logarithmic variables are stationary at the 1%, 5% and 10%
significance levels. Augmented Dickey-Fuller (ADF) procedure has been realized
in Eviews (Annex 2). While evaluating of the parameters of model, it is defined that
the errors follow the normal distribution.
Source: Estimation made via EViews software and summary table of results
compiled by the author.

26