Variable

Measure

Expected Result

Dependent variable

Return on assets (ROA )

Net income after tax as percentage of total assets (%)

Return on equity (ROE)

Net income after tax as percentage of shareholders’ equity (%)

Total Asset Growth (TA)

The percentage

change in total assets from current quarter t -

2 to previous quarter t − 1 minus 1

Independent variable

Real GDP Growth (RGDP)

It is a measure of total economic activity/performance within an economy. The economic growth is measured as the quarterly change in real Jamaican GDP

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Control Variables

Bond Yields (GBY)

Bond Yields are represented

by the 1 year GOJ Bond Yields

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Interest rate (IR)

Interest rates are represented

by the 180-day GOJ Treasury bill rate

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Stock Market Growth (Changes in Main Index) (JSEM)

Growth was measured by using the daily returns of three months and finding the average returns for the quarter.

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Unemployment Rate (UR)

The number of unemployed as a percentage of the labor force (the sum of the employed and unemployed)

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