The Effect of Bank Profitability Indicators on the Growth of the Industrial Sector in Iran Approach to Mild Transmission Regression (STR)

The purpose of this paper is to investigate the impact of bank profitability indices and the growth of the industrial sector in the country. In this study, to evaluate the bank profitability, asset efficiency measures, stock returns and net profit margins were used. Also, in order to study financial development, the indices of the ratio of domestic credits provided by the banking sector to GDP and the ratio of domestic financing provided for the private sector were used. In order to test the relationship between variables, a nonlinear time series model and a gentle transfer regression method for the banking system and industry for the period of 1394-1375 were used. The results indicate that there is a nonlinear relationship between banking and economic variables with the growth of value added of the industry sector. In the nonlinear model model, it was observed that with the growth of inflation rate from 0.135%, the effect of financial development indicators on the growth of value added of the industrial sector is significant and different. The results indicated that the stock return variable had a positive and significant effect on the growth of the industrial sector, as well as the increase in the difference between the income received by the bank and the amount of interest paid to their deposits on the amount of their assets led to an increase In the profitability and efficiency of the bank, which has had a positive impact on the growth of the industrial sector in the country.