| In the traditional theory of money and banking, the commercial banks accelerate or facilitate the transference about monetary resources from savings to investment so that they can share the profits of economic growth and the banks’ profits is closely related to the rise and fall of the economy. But in recent years, with the growth of "shadow banking" and the recession in the economy resulting from financial crisis, the relationship between banks’ profits and the economic growth becomes more complex. On the one hand, the growth of the economy has been a tremendous impact, into a downturn in growth and the enterprise operate difficultly, a substantial declining in profits, but on the other hand, the commercial banks’ profits keep stable growth and the scale of banks’ profits becomes larger. So, how to explain the contradictory phenomenon reasonably between the economic growth and the banks’ profits is particularly important. This paper adopts nonlinear panel smooth transition regression (PSTR) model researching the influence of the economic growth and the three major industries on the banks’ profits from the view of the overall bank and bank category and the results show that the whole economy and the second and third industry have structural and nonlinear effect on banks’ profits, and the effect the whole economy is more complex. The first industry has nonlinear negative impact on banks’ profits, but not significant. The conclusions of the study match more appropriately the dynamic and nonlinear relationship between banks’ profits and the economic growth and that has certain reference value to improve the regulation of commercial banks and formulate and adjust macroeconomic policyThis paper is divided into five parts:The first part is the introduction. Firstly, it clarifies the research background and significance and introduces briefly the research ideas and methods of this paper. At the same time, this part also describes the innovation and deficiency of this paper.The second part is the literature review. Firstly, it elaborates the domestic and foreign research literature about the relationship between economic growth and banks’ profits, and then it introduces the growth, application and main content of the nonlinear panel smooth transition regression model using in the paper. Also, the paper introduces briefly the simulated annealing methodThe third part is the empirical analysis of the whole banks. Firstly, it describes the related variables of this paper and then studies the effect of the economic growth and three major industries on the overall banks’ profits from two angles of linear and nonlinear. Through the empirical analysis, this paper clarifies the relationship between banks’ profits and the economic growth and finds that the economic cycle has asymmetric effects on banks’ profits. The study also finds that the influence of different industries on banks’ profits is significantly different. In addition, the results also show that the net interest margin is an more important factor affecting banks’ profits.The fourth part is the empirical analysis of the classification of banks. Firstly, it determines the classification standard and it analyzes the influence of the whole economy and the three major industries on different banks in scale using the linear and nonlinear model. Classified results are basically consistent with the overall empirical results. Moreover, the classified results show that the effect of the real economy on big, medium-sized banks’ profits is relatively stable, while the small banks’ profits are fluctuant obviously and influenced by real economy dramatically.The fifth part is the policy recommendations. Firstly, it summarizes the main empirical results about the article, and then puts forward some pertinent comments and suggestions according to the empirical results to hope helping commercial banks strengthen the reformation and the support to the economy to achieve long-term coordinated growth about banks’ profits and the economy. |
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