BUAD917 Dissertation Samples | Auckland Institute of Studies

BUAD917 Dissertation Summary

This dissertation studies how New Zealand’s five major banks allocate credit to different sectors between 2020 and 2025. It focuses on lending to Mortgage, SME, and Agricultural sectors. The study finds that mortgage lending is highly affected by changes in interest rates, while agricultural lending remains stable even during economic changes. SME lending slows down the most during tight monetary conditions. The research shows that each sector reacts differently to economic and policy changes.........View More

Table of Contents

Abstract

Acknowledgement

List of Tables

List of Figures

List of Abbreviations & Glossary

Abstract.................................................................................................................................................................... 3

Acknowledgement.................................................................................................................................................. 4

List of Tables........................................................................................................................................................... 8

List of Figures...................................................................................................................................................................................... G

List of Abbreviations & Glossary.................................................................................................................... 11

Chapter 1: Introduction

1.1 Research Context: New Zealand Banking Sector................................................................................... 14

1.1.1 Market Structure.................................................................................................................................. 14

1.1.2 Sectoral Composition.......................................................................................................................... 15

1.1.3 2020-2025 Period................................................................................................................................ 16

1.2 Research Gap and Motivation.................................................................................................................. 18

1.3 Research Questions and

Objectives

1.3.1 Research Questions............................................................................................................................. 19

1.3.2 Research Objectives............................................................................................................................ 19

1.4 Scope of Study............................................................................................................................................. 20

Chapter Summary..........21

Chapter 2: Theoretical Framework Literature Review

2.1 Introduction................................................................................................................................................. 22

2.2 Theoretical Framework.............................................................................................................................. 23

2.2.1 Credit Channel Theory........................................................................................................................ 23

2.2.2 Financial Intermediation Theory....................................................................................................... 24

2.2.3 Information Asymmetry and Credit Rationing Theory.................................................................. 24

2.2.4 Portfolio Choice Theory..................................................................................................................... 24

2.2.5 Financial Accelerator Theory............................................................................................................ 25

2.2.6 Integration of Theoretical Perspectives............................................................................................ 25

2.3 Literature Review

2.3.1 Financial Intermediation and Credit Allocation............................................................................. 29

2.3.2 Sectoral Lending Characteristics....................................................................................................... 29

2.3.3 Determinants of Bank Lending.......................................................................................................... 30

2.3.4 Sectoral Lending Dynamics............................................................................................................... 31

Small and Medium Enterprise Lending................................................................................................. 31

Mortgage Lending..................................................................................................................................... 31

Agricultural Lending................................................................................................................................. 32

2.3.5 Regulatory Frameworks...................................................................................................................... 32

2.3.6 New Zealand Banking Context: Literature Gaps............................................................................ 33

2.4 Research Gaps and Study Justification

2.4.1 Gap One: Integrated Sectoral Analysis............................................................................................. 34

2.4.2 Gap Two: Extraordinary Period Analysis........................................................................................ 34

2.4.3 Gap Three: Bank-Level Heterogeneity............................................................................................. 35

2.4.4 Gap Four: Policy Interaction Effects................................................................................................ 35

2.4.5 Gap Five: Methodological Approaches............................................................................................ 36

2.5 Conceptual Framework

2.5.1 Variable Implementation.................................................................................................................... 36

2.5.2 Expected Variable Relationships...................................................................................................... 37

2.5.3 Hypothesis Development.................................................................................................................... 38

2.5.4 Analytical Framework......................................................................................................................... 39

2.6 Summary

Chapter 3: Research Methodology

3.1 Research Design.......................................................................................................................................... 41

3.2 Data Sources................................................................................................................................................ 41

3.2.1 Sample Selection...................................................................................................................................... 42

3.3 Methodological Justifications..................................................................................................................... 42

3.3.1 Descriptive Analysis................................................................................................................................ 42

3.3.2 Correlation Analysis............................................................................................................................... 44

3.3.3 Bivariate Regression Analysis................................................................................................................ 44

3.3.4 Moderation Analysis............................................................................................................................... 45

3.3.5 Structural Break Analysis......................................................................................................................................................................... 4c

3.4 Data Limitations and Justifications.......................................................................................................... 47

3.4.1 Small Sample Size Constraints.............................................................................................................. 47

3.4.2 Missing Critical Variables..................................................................................................................... 48

3.5 Causality Limitations.................................................................................................................................... 48

3.5.1 Omitted Variable Bias............................................................................................................................. 48

3.5.2 Reverse Causality (Endogeneity)......................................................................................................................................................................... 4S

3.5.3 External Validity Constraints......................................................................................................................................................................... 4S

3.5.4 Boundaries on Causal Inference......................................................................................................................................................................... 4S

3.6 Decision Rules for Hypothesis Testing...................................................................................................... 50

3.7 Comprehensive Research Framework...................................................................................................... 50

3.8 Robustness and Sensitivity Analysis........................................................................................................... 51

3.9 Statistical Conclusion Validity.................................................................................................................... 52

3.10 Comparison with Established Literature............................................................................................... 52

Chapter 4: Empirical Analysis and Results

4.1 Sectoral Lending Portfolio Analysis........................................................................................................ 53

4.2 Cross-Bank Correlation Analysis

4.3 Structural Break Analysis.......................................................................................................................... 57

4.4 OCR Regression Analysis................................................................................................................................................................................ 5G

4.6 Summary of Research Question Findings and linked

Hypothesis 

4.7 Comprehensive Hypothesis Testing

Results 

Chapter 5: Discussion of Findings

5.1 Theoretical Implications

5.1.1 Theoretical Interpretation of Hypothesis Testing Outcomes........................................................ 67

5.1.2 New Zealand Divergence from International Literature................................................................ 68

5.2 Policy and Practice Implications   

5.3 Methodological Limitations 

5.4 Synthesis and Contribution........................................................................................................................ 70

Chapter 6: Conclusion and Implications

6.1 Research Questions and Present Study Responses................................................................................ 73

6.2 Theoretical Contributions: Addressing Research Gaps....................................................................... 75

6.2.1 Quantitative Precision of Sectoral Heterogeneity............................................................................. 75

6.2.2 Resolution of Theoretical Paradox through Methodological Innovation......................................................................................................................................................................... 7c

6.2.3 Validation of Sectoral Moderation as Core Proposition.............................................................................7c

6.2.4 Addressing New Zealand-Specific Knowledge Gaps.......................................................................... 77

6.3 Practical Implications.................................................................................................................................. 77

6.3.1 Implications for Monetary and Macroprudential Authorities.......................................................... 78

6.3.2 Implications for Commercial Bank Strategy......................................................................................................................................................................... 7S

6.4 Research Limitations: Boundary Conditions................................................................................................................................................................................ 7G

6.5 Future Research Directions......................................................................................................................... 80

6.6 Concluding Reflection................................................................................................................................... 81

References............................................................................................................................................................. 83

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