Student Worksheet: Analyzing a Journal Article

Name: _____________________________________________ Date: ________________________

Journal article title: ________________________________________________________________
What is the purpose/hypothesis/aim/objective of the study?
a. Write down the exact statement in which the
authors describe what they were testing. (Hint:
This information may be provided in the article as
a purpose statement or as a hypothesis). Include
quotation marks around the exact wording, and
indicate page number(s).
b. Now describe the purpose of the study (as you
understand it) in your own words.
c. What was the “gap” in the research that the
authors were trying to fill by doing their study?
( The difference between the research paper and
the previous studies)
What is/are the major finding(s) of the study?
a. Make some notes about the authors’ major
conclusions or findings as written in the article.
Include quotation marks whenever you use their
exact wording, and indicate page number(s).
b. Now write those conclusions (as you
understand them) in your own words
How did the authors test their hypothesis?
a. Briefly summarize the main steps or The study of Shabir, et al. (2023) uses various
measurements that the authors used in their measures of bank stability to comprehensively
methods. Try to explain in your own words as analyze the impact of COVID-19 on the banking
much as possible. industry. The Z-score is used as the proxy for
bank default risk, indicating a bank's distance to
insolvency based on accounting data. The non-
performing loan ratio is used as a proxy for bank
credit risk, reflecting the weak ability of banks to
manage credit risk. The volatility of net interest
margin is used as a proxy for bank operational
risk, indicating the level of risk in a bank's
operations. To further analyze the impact of
COVID-19 on bank performance and stability, the
Z-score is decomposed into two components:
portfolio risk and leverage risk. The study uses
various existing studies as references to support
their methodological choices. Additionally, the
study standardizes the measures by multiplying
them by (-1) to facilitate comparability with other
bank risk measures, where higher values indicate
increased bank risk.

Furthermore, the study uses a time dummy to


b. Do the authors suggest any problems or
limitations with their methodology? Do you see
any problems or limitations with their
methodology?
c. How did the authors analyze their data? What
test/s did they use?
separate pre-and post Covid-19 periods and
includes bank and country-specific control
variables to address potential omitted variables.
Bank-specific control variables include bank size,
capitalization, liquidity, asset structure, and
diversification. Country-specific control variables
include GDP per capita, inflation, and bank
concentration. The study aims to examine how
the COVID-19 pandemic affected the banking
sector's performance and stability.
There are several limitations in their empirical
framework that are acknowledged by the authors
of the study, including the recognition that the
severity of the pandemic may differ based on
country-specific policies, resulting in a
susceptibility of the measurement of COVID-19
cases to the endogeneity problem. However,
they believe that their sample period, which
mostly covers the first wave of the pandemic, is
less contaminated by government interventions
and reflects the exogenous nature of virus
transmission. The study has to rely on data that
only covers a limited timeframe, which may not
be sufficient to capture the full impact of the
pandemic on the banking sector.
They argue that the study’s main focus is on bank
performance and stability, and it does not cover
bank lending strategy, which is an essential
aspect. Furthermore, they suggest that future
researches should explore how policy measures
implemented worldwide have affected bank
lending decisions and real economic outcomes
and also explore whether COVID-19 has led to
bank runs or market crashes in some countries.
The researchers used The Prospect theory,
established by Kahneman and Tversky (1979),
emphasizes that investors set and decide the
portfolio under risk. This theory concerns risk-
averse investors’ behavior and anomalies, which
explains the negative correlation between risk
and return. Using the Prospect Theory they
therefore hypothesized that COVID-19 outbreak
has adversely impact bank performance and
stability.
In order to examine the impact of COVID-19 on

Based on your analysis, are the claims made in this journal article accurate?
Do the conclusions made (about the results) by
the author make sense to you? Are the
conclusions too broad or too narrow based on
what was actually done in the study?
What is the importance of this scientific work?
the banking sector, the authors of the study
obtained quarterly balance sheet data of 2073
listed and unlisted banks in 106 different
countries from the Bankscope database for the
period of 2016Q1 to 2021Q2. They preferred
quarterly frequency data as daily and monthly
data was not available for financial and
accounting data, and the COVID-19 period only
covers two quarters. Country-specific variables,
such as GDP per capita, inflation, and bank
concentration, were taken from the IMF and
World Bank. The authors chose their frequency of
data based on the current financial and
accounting data availability in 2020-21.
Furthermore, to measure the banks performance
the authors used the four alternative accounting-
based measures in our analysis as a dependent
variable to evaluate the bank’s performance.
These accounting-based measures return on
average total assets (ROAA), return on average
equity (ROAE), the cost to income ratio (CIN), and
net interest margin ratio (NIM). following the
previous studies of their fellow researchers
Elnahass et al. (2021), Adesina (2021), and Dan
Dang and Huynh (2021) These are considered the
banking sector’s most accepted financial
performance measures, providing better
sustainability predictions
Yes, the study's results and conclusions made
sense. The findings might pave the way for
further study on the same issue. However, given
the timeframe, it was too narrow. As the study
on the impact of the COVID-19 outbreak on
financial and banking stability is still at an early
stage. It was covid at its peak, and the pandemic
is still ongoing, and its impact on the banking
sector is constantly evolving. The authors also
stated that the study is limited to financial and
banking stability and that the bank lending
strategy is not covered, which they believed was
an important aspect. As a result, there may be
limited data available for researchers to analyze,
especially for countries with weaker data
collection systems.
 Write (in your own words) the significant
contributions of the experimental work in this
journal article as reported by the authors.
According to the study, COVID-19 has had a
significant negative impact on bank performance
and stability. The authors examined whether this
impact depended on specific bank and country
factors. They found that smaller,
undercapitalized, less diversified, foreign, and
government-owned banks were the most
negatively affected by the pandemic. In contrast,
a better regulatory environment, institutional
quality, and higher financial development helped
to mitigate the adverse impacts of COVID-19 on
bank performance and stability. These findings
were consistent across various model
specifications and geographical regions. The
study also observed varying impacts of COVID-19
on different types of banks, including foreign,
government, Islamic, conventional, listed, and
unlisted banks. This information could help
policymakers and regulators in understanding the
problems that the banking sector faces during a
pandemic and developing proper policy
responses that minimize the negative
consequences of such crises.

For their bank stability measurement

Firstly, we followed the earlier studies of Laeven and Levine (2009), Elnahass et al. (2021), and Shabir et
al. (2021) and used the Z-score as the proxy for bank default risk. The Z-score determines the bank’s
distance to insolvency (Roy, 1952), and it is assumed to be an unbiased bank risk indicator based on
accounting data.

Using the The Z-score it shows the number of standard deviations below the expected value of a bank’s
ROA at which equity is depleted and the bank is insolvent

a. Briefly summarize the main steps or measurements that the authors used in their methods.
Try to explain in your own words as much as possible.

To assess the effects of COVID-19 on the banking industry, the authors gathered balance sheet data on a
quarterly basis from Bankscope database. The data pertained to 2073 banks listed and unlisted in 106
countries and covered the period from the first quarter of 2016 to the second quarter of 2021.
It is challenging to evaluate and capture a bank’s overall performance using a single measure (Baselga-
Pascual and Vah¨ ¨

amaa,

2021). Therefore, we followed the previous studies of Elnahass et al. (2021), Adesina (2021), and Dan
Dang and Huynh (2021), used

four alternative accounting-based measures in our analysis as a dependent variable to evaluate the
bank’s performance. These

accounting-based measures return on average total assets (ROAA), return on average equity (ROAE), the
cost to income ratio (CIN),

and net interest margin ratio (NIM). These are considered the banking sector’s most accepted financial
performance measures,

providing better sustainability predictions (Simpson and Kohers, 2002).

The study employs various measures of bank stability to comprehensively analyze the impact of
COVID-19 on the banking industry. The Z-score is used as the proxy for bank default risk,
indicating a bank's distance to insolvency based on accounting data. The non-performing loan
ratio is used as a proxy for bank credit risk, reflecting the weak ability of banks to manage credit
risk. The volatility of net interest margin is used as a proxy for bank operational risk, indicating
the level of risk in a bank's operations. To further analyze the impact of COVID-19 on bank
performance and stability, the Z-score is decomposed into two components: portfolio risk and
leverage risk. The study uses various existing studies as references to support their
methodological choices. Additionally, the study standardizes the measures by multiplying them
by (-1) to facilitate comparability with other bank risk measures, where higher values indicate
increased bank risk.

The study uses a time dummy to separate pre-and post Covid-19 periods and includes bank and
country-specific control variables to address potential omitted variables. Bank-specific control
variables include bank size, capitalization, liquidity, asset structure, and diversification. Country-
specific control variables include GDP per capita, inflation, and bank concentration. The study
aims to examine how the COVID-19 pandemic affected the banking sector's performance and
stability.

The study of Shabir, et al. (2023) uses various measures of bank stability to
comprehensively analyze the impact of COVID-19 on the banking industry. The Z-score is
used as the proxy for bank default risk, indicating a bank's distance to insolvency based
on accounting data. The non-performing loan ratio is used as a proxy for bank credit risk,
reflecting the weak ability of banks to manage credit risk. The volatility of net interest
margin is used as a proxy for bank operational risk, indicating the level of risk in a bank's
operations. To further analyze the impact of COVID-19 on bank performance and stability,
the Z-score is decomposed into two components: portfolio risk and leverage risk. The
study uses various existing studies as references to support their methodological
choices. Additionally, the study standardizes the measures by multiplying them by (-1) to
facilitate comparability with other bank risk measures, where higher values indicate
increased bank risk.
Furthermore, the study uses a time dummy to separate pre-and post Covid-19
periods and includes bank and country-specific control variables to address potential
omitted variables. Bank-specific control variables include bank size, capitalization,
liquidity, asset structure, and diversification. Country-specific control variables include
GDP per capita, inflation, and bank concentration. The study aims to examine how the
COVID-19 pandemic affected the banking sector's performance and stability.

b. Do the authors suggest any problems or limitations with their methodology? Do you see any
problems or limitations with their methodology?

Quarterly frequency data is preferred for the

following basis: (a) The most important reason is that daily and monthly data is not available for
financial and accounting data; (b) the COVID-19 period covers only two quarters. Hence, our frequency
is driven by current financial and accounting data availability in 2020–21.
It is challenging to evaluate and capture a bank’s overall performance using a single measure (Baselga-
Pascual and Vah¨ ¨

amaa,

2021). Therefore, we followed the previous studies of Elnahass et al. (2021), Adesina (2021),

c. How did the authors analyze their data? What test/s did they use?

For their bank stability measurement

Firstly, we followed the earlier studies of Laeven and Levine (2009), Elnahass et al. (2021), and Shabir et
al. (2021) and used the Z-score as the proxy for bank default risk. The Z-score determines the bank’s
distance to insolvency (Roy, 1952), and it is assumed to be an unbiased bank risk indicator based on
accounting data.

Using the The Z-score it shows the number of standard deviations below the expected value of a bank’s
ROA at which equity is depleted and the bank is insolvent

 we followed the previous studies of Elnahass et al. (2021), Adesina (2021), and Dan Dang and
Huynh (2021), used four alternative accounting-based measures in our analysis as a dependent
variable to evaluate the bank’s performance. These accounting-based measures return on
average total assets (ROAA), return on average equity (ROAE), the cost to income ratio (CIN),

 this study, we follow Elnahass et al. (2021) and Ҫolak and Oztekin ¨ (2021) and use a time
dummy to separate pre-and postCovid-19 periods, which equals 1 for the first three quarters of
2020 and zero otherwise.

 In addition to COVID-19, we have included several banks and country-specific control variables
in our model to address the potential omitted variables problem. The bank-specific control
variables are bank size, capitalization, liquidity, asset structure, and diversification. Bank size
(SIZE) is calculated through the natural logarithm of a bank’s total assets. Capitalization (CAP) is
measured as equity to total assets. The ratio of liquidity assets to total assets has been used as
 the proxy for bank liquidity (LIQ). We measure the bank’s asset structure (LTA) as the share of
the net loan to total assets. Bank diversification (DIV) is measured by the ratio of noninterest
income to net operating income. While the country-specific control variables are GDP per capita,
inflation, and bank concentration

In this study, we follow Duan et al. (2021) and Elnahass et al. (2021) and build an empirical model to
examine the impact of the COVID-19 pandemic on bank performance and stability using individual bank-
level data globally. Thus our baseline model is shown as follows

Write (in your own words) the significant contributions of the experimental work in this journal article
as reported by the authors.

Our sample consists of 2073 listed and unlisted banks in 106 countries from 2016Q1 to 2021Q2. We
employ several alternative bank performance and stability measures for a comprehensive analysis and
robustness. The findings show that the outbreak of COVID-19 has significantly decreased bank
performance and stability

LIMITATIONS

Availability of data: The COVID-19 pandemic is an ongoing event that is still unfolding, and its impact
on the banking sector is constantly evolving. As such, there may be limited data available for
researchers to analyze, especially for countries with weaker data collection systems.

Timeframe: Due to the ongoing nature of the pandemic, the study may have to rely on data that only
covers a limited timeframe, which may not be sufficient to capture the full impact of the pandemic on
the banking sector.
Generalizability: The impact of the pandemic on the banking sector may vary widely across countries,
depending on factors such as the severity of the outbreak, government policies, and the strength of
the banking system. As such, the findings of a cross-country analysis may not be applicable to all
countries.

The authors of the study acknowledge several limitations in their empirical framework. They
recognize that the severity of the pandemic may vary based on country-specific policies, which can
make the measurement of COVID-19 cases susceptible to the endogeneity problem.

There are several limitations in their empirical framework are acknowledged by the authors of the
study, including the recognition that the severity of the pandemic may differ based on country-specific
policies, resulting in a susceptibility of the measurement of COVID-19 cases to the endogeneity
problem. However, they believe that their sample period, which mostly covers the first wave of the
pandemic, is less contaminated by government interventions and reflects the exogenous nature of
virus transmission. The study has to rely on data that only covers a limited timeframe, which may not
be sufficient to capture the full impact of the pandemic on the banking sector.

They argue that the study’s main focus is on bank performance and stability, and it does not cover
bank lending strategy, which is an essential aspect. Furthermore, they suggest that future researches
should explore how policy measures implemented worldwide have affected bank lending decisions
and real economic outcomes and also explore whether COVID-19 has led to bank runs or market
crashes in some countries.

Additionally, the study could examine whether the COVID-19 crisis has impacted bank operations,
business models, and banking market structure, as well as whether it has led to bank runs or market
crashes in some countries.Finally, the study suggests exploring whether COVID-19 has led to bank runs
or market crashes in some countries.
The researchers used The Prospect theory, established by Kahneman and Tversky (1979), emphasizes
that investors set and decide the portfolio under risk. This theory concerns risk-averse investors’
behavior and anomalies, which explains the negative correlation between risk and return. Using the
Prospect Theory they therefore hypothesized that COVID-19 outbreak has adversely impact bank
performance and stability.

In order to examine the impact of COVID-19 on the banking sector, the authors of the study obtained
quarterly balance sheet data of 2073 listed and unlisted banks in 106 different countries from the
Bankscope database for the period of 2016Q1 to 2021Q2. They preferred quarterly frequency data as
daily and monthly data was not available for financial and accounting data, and the COVID-19 period
only covers two quarters. Country-specific variables, such as GDP per capita, inflation, and bank
concentration, were taken from the IMF and World Bank. The authors chose their frequency of data
based on the current financial and accounting data availability in 2020-21.

Furthermore, to measure the banks performance the researchers used the four alternative
accounting-based measures in our analysis as a dependent variable to evaluate the bank’s
performance. These accounting-based measures return on average total assets (ROAA), return on
average equity (ROAE), the cost to income ratio (CIN), and net interest margin ratio (NIM). following
the previous studies of their fellow researchers Elnahass et al. (2021), Adesina (2021), and Dan Dang
and Huynh (2021) These are considered the banking sector’s most accepted financial performance
measures, providing better sustainability predictions

LAST QUESTION

. The findings show that the outbreak of COVID-19 has significantly decreased bank performance and
stability. We also determine whether the pandemic’s impact on the performance and stability of the
bank depends on the specific factors of the bank and the country. A bank’s financial condition during a
crisis/pandemic is an important factor in its survival. More specifically, we find that bank performance
and stability are most negatively affected by the COVID-19 outbreak in smaller, undercapitalized, less
diversified, foreign, and government-owned banks. We find a better regulatory environment, superior
institutional quality, and higher financial development, minimizing the adverse impacts of COVID-19
on banks’ performance and stability. Our primary outcomes continue across alternative model
specifications, such as GMM, which capture the potential endogeneity issues. These findings
persistently appear across several geographical regions and countries’ income classifications. Finally,
we observed the discriminating impacts of COVID-19 on the performance and stability of different
types of banks (e.g., foreign, government, Islamic banks, conventional, listed, and unlisted).

According to the study, COVID-19 has had a significant negative impact on bank performance and
stability. The authors examined whether this impact depended on specific bank and country factors.
They found that smaller, undercapitalized, less diversified, foreign, and government-owned banks
were the most negatively affected by the pandemic. In contrast, a better regulatory environment,
institutional quality, and higher financial development helped to mitigate the adverse impacts of
COVID-19 on bank performance and stability. These findings were consistent across various model
specifications and geographical regions. The study also observed varying impacts of COVID-19 on
different types of banks, including foreign, government, Islamic, conventional, listed, and unlisted
banks. This information could help policymakers and regulators in understanding the problems that
the banking sector faces during a pandemic and developing proper policy responses that minimize the
negative consequences of such crises.

it provides insights into the impact of the COVID-19 pandemic on the banking sector, which is a critical
component of the global economy. The study examines the effects of the pandemic on bank
performance and stability using individual bank-level data from a large sample of listed and unlisted
banks in 106 different countries. The findings of the study suggest that the COVID-19 outbreak has
significantly decreased bank performance and stability, and that the impact varies depending on the
specific factors of the bank and the country.

Second, the main focus of this study is on bank performance and stability, while the bank lending
strategy is an important aspect that is not

covered. However, the study on the impact of the COVID-19 outbreak on financial and banking
stability is still at an early stage. Future work should seek how different policy measures implemented
worldwide impacted bank lending within and across the border decisions and real economic
outcomes.

Yes, the study's results and conclusions made sense. The findings might pave the way for further study
on the same issue. However, given the timeframe, it was too narrow. As the study on the impact of
the COVID-19 outbreak on financial and banking stability is still at an early stage. It was covid at its
peak, and the pandemic is still ongoing, and its impact on the banking sector is constantly evolving.
The authors also stated that the study is limited to financial and banking stability and that the bank
lending strategy is not covered, which they believed was an important aspect. As a result, there may
be limited data available for researchers to analyze, especially for countries with weaker data
collection systems.

Yes, the findings and conclusions of the study made logical. The findings might pave the way for
further study on the same issue. However, given the time constraints, it was too narrow. It was covid
at its peak, and the COVID-19 pandemic is still ongoing, with its influence on the financial industry
changing all the time. As a result, researchers may have insufficient data to analyze, particularly in
nations with inferior data gathering procedures.
Availability of data: