Page 518 - ISC PROCEEDINGS 21.4

pairwise relationships, EFFR shows the strongest association with bank stability in
absolute terms.
The correlations among the explanatory variables are generally low to moderate.
Although some coefficients are statistically significant, none appears sufficiently high to
indicate a serious multicollinearity concern at the pairwise level. Overall, the correlation
matrix provides preliminary support for the regression analysis while suggesting that the
explanatory variables capture distinct dimensions of bank characteristics, institutional
conditions, and macroeconomic environments.
4.2. Baseline results
Table 3. Fixed effects regression result with clustered standard errors

Dependent variable: LN1ZSCORE

VARIABLES Baseline Model
ESG 0.2034***

(0.0354)

CORRUPTION 0.0312***
(0.0049)

LN_TA -0.1263

(0.1528)
EA 0.4469

(1.0943)

EFFR -0.0059***
(0.0011)

LS 0.3597
(0.5595)

GDPG 0.0001

(0.0148)
INFLATION 0.05233***

(0.0151)

Constant 0.8910
(1.8255)

Observations 563

Number of groups 144

Within R-squared 0.2722
Rho 0.6371

517