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It is shown in the literature that the Arellano–Bond type generalized method of moments (GMM) of dynamic panel models is asymptotically biased (e.g., Hsiao & Zhang, 2015; Hsiao & Zhou, 2017). To correct the asymptotical bias of Arellano–Bond GMM, the authors suggest to use the jackknife instrumental variables estimation (JIVE) and also show that the JIVE of Arellano–Bond GMM is indeed asymptotically unbiased. Monte Carlo studies are conducted to compare the performance of the JIVE as well as Arellano–Bond GMM for linear dynamic panels. The authors demonstrate that the reliability of statistical inference depends critically on whether an estimator is asymptotically unbiased or not.

Corporate social responsibility (CSR) and corporate social irresponsibility (CSIR) co-exist within many firms. Yet, without understanding how CSR and CSIR are related, our knowledge of these concepts is incomplete. This study initiatively explores four relationships between prior CSR/CSIR and subsequent CSR/CSIR.

This study uses the KLD database as the source of measures on CSR and CSIR. The final sample contains 1,820 firms and 14,420 firm-year observations from 1991 to 2013. The Arellano—Bond GMM estimator is used to test the hypotheses.

The empirical analyses yield the following results: (1) a positive relationship between prior CSR and subsequent CSR, (2) a negative relationship between prior CSR and subsequent CSIR, (3) a positive relationship between prior CSIR and subsequent CSR and (4) a positive relationship between prior CSIR and subsequent CSIR.

This study provides comprehensive evidence of the dynamic relationships between CSR and CSIR by incorporating multiple relationships between these variables into a single study. It also identifies key contexts that shape these relationships and identifies several promising areas of further inquiry.

This study is the first to examine the dynamic CSR – CSIR relationships in a single study. Most previous studies investigate either CSR or CSIR; few studies have incorporated them into one study.

The recent financial and sovereign debt crises around the world have sparked a growing literature on models and empirical estimates of defaultable debt. Frequently households and firms come under default threat, local governments can default, and recently sovereign default threats were eminent for Greece and Spain in 2012–2013. Moreover, Argentina experienced an actual default in 2001. What causes sovereign default risk, and what are the escape routes from default risk? Previous studies such as Arellano (2008), Roch and Uhlig (2013), and Arellano et al. (2014) have provided theoretical models to explore the main dynamics of sovereign defaults. These models can be characterized as threshold models in which there is a convergence toward a good no-default equilibrium below the threshold and a default equilibrium above the threshold. However, in these models aggregate output is exogenous, so that important macroeconomic feedback effects are not taken into account. In this chapter, we (1) propose alternative model variants suitable for certain types of countries in the EU where aggregate output is endogenously determined and where financial stress plays a key role, (2) show how these model variants can be solved through the Nonlinear Model Predictive Control numerical technique, and (3) present some empirical evidence on the nonlinear dynamics of output, sovereign debt, and financial stress in some euro areas and other industrialized countries.

This paper aims to examine the dynamic nexus between corporate governance (CG) and firm performance in hybrid model countries. It also investigates the effect of horizontal agency conflicts on CG adherence.

This research uses vector autoregression methods and dynamic panels to examine the cross-sectional and longitudinal association between CG and performance, using three CG adherence indexes of transparency, management and board governance. The data set includes annual market and firm performance data from a sample of 93 companies trading in the Mexican stock market for the period 2010–2016.

This study finds evidence of dynamic interdependence between CG and firm performance, as well as weak effects of CG adherence on firms’ performance. The adverse effect of increasing return on equity and return on assets (ROE-ROA) gaps on CG adherence, which results from agency conflicts and insider ownership, is likely behind the weak association between CG and firm performance.

The findings in this study provide evidence that hybrid systems weaken the nexus between CG and firm performance. The propensity to prefer banking and bond debt to issuing stocks, as indicated by a greater ROE-ROA gap, points to favorable provisions for majority shareholders, adverse normative environments for minority shareholders and a low level of compliance with CG measures, among other problems.

This paper seeks to contribute to the study of the link between financial intermediation and economic growth in the context of the European Union and particularly in the context of the integration of new member‐states.

Panel fixed and dynamic Arellano‐Bond estimates (with balanced panels) were used to explain and compare the influence of financial intermediation with the real per‐capita GDP growth in two sub‐sets of EU countries: the first one takes into account the availability of quarterly data and comprises 11 “old” EU countries, excluding Luxembourg, Denmark, Ireland and Sweden, for the period between Q2 1980 and Q4 1998; the second panel includes 24 EU countries (excluding only Luxembourg) for the period between Q2 1999 and Q4 2002. The existing empirical evidence was enhanced by introducing some financial variables to explain the real per‐capita GDP growth, namely, the real domestic credit growth, the real foreign liabilities growth, the real growth of the sum of the bonds and money market instruments, in addition to two ratios: bank assets/bank liabilities and domestic credit/bank deposits.

The results obtained confirm the importance of these variables to the real per‐capita GDP growth and allow one to draw conclusions on some differences in the behaviour and the level of integration of the two groups of EU countries. There is a relatively more homogeneous behaviour in the first panel, while the results for the second panel indicate that, in spite of the relative heterogeneity and the differences in their historical evolution, all the countries have had to adapt rapidly to the increasing competition and to the new EU market conditions.

The paper confirms the influence of financial systems on output growth, as well as the efforts of financial institutions to adapt to the new conditions of the European and global markets in spite of all the differences in the historical evolution and initial conditions among EU member‐states.

Numerous researchers have developed theories and studies to uncover the issues pertinent to dividend policy dynamics, but it is still one of the unresolved problems of finance. The purpose of this paper is to focus on a new dimension, i.e., financial expertise on the corporate board for explaining the dividend policy dynamics in the emerging equity markets of China and Pakistan.

The study employs static (fixed effect (FE) and random effect (RE)) and dynamic models – two-step generalized method of moments (GMM) estimation techniques by Arellano and Bond (1991) and Arellano and Bover (1995) – during the timespan from 2009 to 2014. Further, this study re-estimated FE, RE and GMM two-step estimation techniques by excluding the non-dividend-paying companies, and also employed instrumental variable regressing by using two instrumental variables – industry average financial expertise of the board and board size – as proxies for board financial expertise to control the possible endogeneity.

The study reveals that Chinese firms having more financial expertise on the board do not take dividends as a control mechanism (substitution hypothesis), while Pakistani firms support the compliment hypothesis and use dividends as a control mechanism to mitigate agency conflict to protect shareholders’ interests and keep additional funds from the manager’s opportunism. Further robustness models also confirm the presence of a significant association between dividend policy and board financial expertise in both equity markets.

This study introduces the financial expertise on a board as a determinant of dividend policy. To the best of the authors’ knowledge, no previous studies have focused on board-level financial expertise as a contributing factor toward dividend policy.

The distinctive feature of Islamic financial intermediation is its foundation on profit-and-loss sharing which reinforces solidarity and fraternity between partners. Thus, the bank margin and its determinants may differ between Islamic and conventional banks (CBs). The purpose of this paper is to empirically assess the main factors that explain the bank margin in a panel of Islamic and CBs operating in the Middle East and North Africa (MENA) region. This study will permit to identify the common and the specific determinants of the intermediation margins in dual banking systems.

The authors use a dynamic panel approach. The empirical analysis is carried out for a sample of 50 Islamic banks (IBs) and 126 CBs from 14 MENA countries.

The results reveal that net profit margins of IBs may be explained for the most part by risk aversion, inefficiency, diversification and economic conditions. With regard to CBs, their margins depend positively on market concentration and risk aversion and negatively on specialization, diversification, inefficiency and liquidity.

The significant impact of the degree of diversification on margins suggests that any policy analysis of the pricing behavior of banks should rely on its whole output. The high levels of margins in Islamic and CBs based in the MENA region may represent an obstacle to these countries to pursue their development process. Thus, policy makers in these countries should consolidate the role of capital markets and nonbanking financial institutions to provide alternative sources of funding and stimulate more competition.

The positive relationship between concentration and net interest margins requires that policy makers should create competitive conditions if they want to lower the social cost of financial intermediation. The creation of competitive conditions may be achieved through encouraging the establishment of new domestic banks or the penetration of foreign banks.

The present study aims to contribute to the existing literature on the determinants of bank margins in three ways. First, the authors identify the factors that most explain bank margins for both conventional and IBs. The majority of previous studies examine the determinants of the profitability or the overall performance of banks and in particular conventional ones. Second, this paper employs two generalized method of moments (GMM) approaches introduced by Arellano and Bover (1995) and Arellano and Bond (1991). It differs from Hutapea and Kasri (2010) who employed the co-integration technique to examine the long-run relationship between Islamic and CB margins and their determinants in Indonesia. Third, unlike previous studies focusing on MENA region that use a small number of countries and a short sample period, the period of study covers 16 years from 1999 to 2014 and a large sample of countries (14 countries). This paper differs from Lee and Isa (2017) who applied the dynamic two-step GMM estimator technique introduced by Arellano and Bond (1991) to study the determinants of intermediation margins of Islamic and CBs located in Malaysia.

The purpose of this paper is twofold. First, it aims to investigate the dynamic impact of board composition (board size, board independence and board diversity) on independent corporate social responsibility (CSR) practices (marketplace, environment, community and workplace). Second, it tends to examine the mutual effect of board composition and CSR practices on organizational returns (return on assets and Tobin’s Q) of 631 Malaysian PLCs listed on Bursa Malaysia during 2006-2017.

The dynamic model (system GMM) provided by Arellano and Bond (1991) and Arellano and Bover (1995) is used for estimations that control for potential dynamic endogeneity, reverse causality, unobserved heterogeneity and simultaneity problems.

Findings reveal weak linkage between board composition and CSR practices where only board diversity is found to be positively linked to marketplace practices of CSR. Further, the mutual impact of board composition and CSR practices on organizational returns suggests board size be positive and board independence to be negative with Tobin’s Q. Board diversity is negative with ROA and positive with Tobin’s Q. Conversely, CSR practices indicate marketplace practices are positive and community practices are negative with Tobin’s Q, environment practices are insignificant with performance, whereas workplace practices are positive with ROA and negative with Tobin’s Q.

This research is practically considerable for Bursa Malaysia, Securities Commission Malaysia, policymakers, stakeholders, investors and managers. For academia, the theoretical linkages between agency theory, resource dependence theory, resource-based view and stakeholder theory are highlighted. Moreover, methodological underpinnings are also novel for academicians as well as for practitioners.

The paper uncovers multiple aspects: first, it elaborates the dynamic relationship between board composition and CSR practices; second, it examines the combined effect of board composition and CSR practices on company’s accounting and market gains; finally, the study controls for dynamic endogeneity that is the main econometric problem for CG-CSR-performance relationships.

Numerous empirical studies have been conducted to analyze the impact of board gender diversity (BGD) on firm performance without being able to establish a clear relationship. In this paper, we reassess the relationship between BGD and firm performance by using a quantile regression approach. Our results indicate that BGD matters only across a subset of the firm performance distribution. Moreover, when the possible endogeneity of the relationship between BGD and firm performance is taken into account, there are some conditions under which a positive and significant relationship is observed for the eight lowest quantiles.

This study purposely re‐examine the mortgage–finance nexus in Africa.

This study adopted a panel data set spanning over the period 1995–2017 by using system generalized method of moments (GMM) dynamic pooled estimator developed by Arellano and Bond (1991) and Arellano and Bover (1995) involving 51 African countries.

The findings discovered that financial development (bank asset) affects mortgage development positively and this effect is highly significant while broad money supply as a measure of financial development impedes mortgage development in Africa. Furthermore, with the introduction of the quadratic term, broad money supply established a U-shaped relationship with mortgage financing indicating that more money in circulation facilitates mortgage development in Africa. However, the shape of the other variables depends largely on the nature of proxy used.

This study is unique in many aspects. First, examining the extant literature on the financial development and mortgage financing nexus, to the best of the authors’ knowledge, no study is cited at the African level with this relationship. Secondly is the empirical model, as it used the system GMM dynamic pooled estimator developed by Arellano and Bond (1991) and Arellano and Bover (1995) to establish whether there is any effect of finance–mortgage nexus.