Financial and Macroeconomic Determinants of Profitability: Empirical Evidence from the Brazilian Banking Sector

Marketing firm performance: When does marketing lead to financial gains?

“…The results indicate that marketing can be effective in preventing a company from toppling with economic crises (Bamiatzi et al, ; O'Malley et al, ; Pearce & Michael, ) and can be the key to exiting such crises, corroborating H2a and H2b. This can be explained because the recessive economic scenario is an operation that establishes that the profit (or reduction of loss) derived from marketing actions is more effective for increasing the company's operational efficiency (Rover, Tomazzia, & Fávero, ) than that derived from reducing administrative costs.…”

“…However, when the company was financially reinforced and the economy is booming, investment in marketing did not generate any effect over ROA, showing ineffectiveness. It is possible that the optimism from easy gains (Pompian, ) means the company does not prioritize operational efficiency (Rover et al, ), thus attenuating or eliminating the positive effect of marketing. This shows that the company should not increase marketing investments because they would not be effective in ROA.…”

Modelling the dynamic connectedness among commodity prices, banking sector’s financial soundness, and macroeconomic variables in Ghana

“…The banking sector is an important intermediary in the commodity dependent economy, providing funding for investment and consumption activities (Ramlall 2018a;Bank of Ghana 2021b;Schneider 2022). A healthy banking sector can support economic growth by providing credit to businesses and households (Rover et al 2013;Schneider 2022). On the other hand, a weak banking sector can lead to financial instability and negative spillover effects on the broader economy (Vo et al 2019;Abdullahi 2020).…”

“…Changes in commodity prices can therefore affect the quality of banks' loan portfolios, with lower commodity prices potentially leading to loan defaults and higher credit risk (Okyere and Mensah 2021;Kyei et al 2023). Fluctuations in macroeconomic variables can affect the level of dynamic connectedness between commodity prices and the banking sector (Rover et al 2013;Anshu and Gakhar 2019;Abdullahi 2020). For example, higher interest rates can lead to a tightening of credit conditions, which could reduce banks' exposure to commodity prices.…”