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1 – 10 of over 1000Sarit Biswas, Sharad Nath Bhattacharya, Justin Y. Jin, Mousumi Bhattacharya and Pradip H. Sadarangani
This paper empirically investigates whether trade openness (TO) in Brazil, Russia, India, China and South Africa (BRICS) countries affects how banks might employ loan loss…
Abstract
Purpose
This paper empirically investigates whether trade openness (TO) in Brazil, Russia, India, China and South Africa (BRICS) countries affects how banks might employ loan loss provisions (LLPs) to smooth out their earnings and how adopting the International Financial Reporting Standards (IFRS) can mitigate it.
Design/methodology/approach
The analysis includes 78 commercial banks from five BRICS nations and spans 2014 through 2020. To test these hypotheses, the authors utilized a fixed-effect and two-step system panel generalized methods of moments (GMM) estimator.
Findings
TO positively affects income smoothing (earnings management) across BRICS commercial banks. The effect is clearer in banks that make financial reports under the IFRS. Path analysis reveals that the effect of TO is driven by nonperforming loans (NPLs). Additionally, the IFRS restricts earnings management in the BRICS banking sector when a better institutional environment is present. The authors found that accounting rules (IFRS) and enforcement (better institutional settings) interact to enhance earnings’ quality.
Practical implications
The relationship between TO and bank earnings management practices is important for understanding the complex interplay between trade and finance and ensuring financial stability, investor confidence and regulatory compliance. This study recommends better regulations and governance mechanisms for financial reports in emerging nations like BRICS. Additionally, macro-prudential regulators and banking supervisors should work closely to ensure transparent TO decisions with improved discipline, institutional quality and regulatory support to enhance bank stability.
Originality/value
The study finds evidence of bank income smoothing in the BRICS and introduces TO as a determinant. It also identifies the evolving role of IFRS in the presence of higher institutional quality and TO, thereby expanding the financial reporting literature.
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The purpose of this study is to explore how the unprecedented rise in the economic policy uncertainty influence Indian banking sector stability. The unprecedented rise in the…
Abstract
Purpose
The purpose of this study is to explore how the unprecedented rise in the economic policy uncertainty influence Indian banking sector stability. The unprecedented rise in the economic policy uncertainty during the recent pandemic has garnered the attention of policymakers to investigate its consequences on different sectors of the economy.
Design/methodology/approach
In this quest, the present study uses system generalized method of moments and other econometric tools to examine the influence of economic policy uncertainty on the Indian banking sector, covering the time frame from 2000 to 2022. In addition, the current study also investigates the mediating role of regulation and supervision in the nexus of economic policy uncertainty and the Indian banking sector stability.
Findings
The empirical outcome reveals that economic policy uncertainty negatively influences banking stability. However, when economic policy uncertainty interacts with stringent banking regulations, private monitoring and supervisions, it assists in diversifying the negative impact of economic policy uncertainty on the Indian banking sector stability.
Originality/value
To the best of the author’s knowledge, the study is an original work and provides robust estimates that will assist policymakers in understanding the influence of policy uncertainty on the banking stability. Moreover, the study also helps in understanding the role of supervision and regulation in mitigating the negative consequences of policy uncertainty on the banking stability.
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Ahmet Coşkun Yıldırım and Erkan Erdil
This study aims to understand the impacts of Covid-19 on the progression of digitalization of banks in an emerging market. For this purpose, business model canvas (BMC) is used as…
Abstract
Purpose
This study aims to understand the impacts of Covid-19 on the progression of digitalization of banks in an emerging market. For this purpose, business model canvas (BMC) is used as a theoretical framework to explore these effects on each business elements of Turkish Banks’ business strategies.
Design/methodology/approach
Data are collected through structured interviews with the top managers of seven diversified banks. Interview questions are designed based on BMC.
Findings
The results show that the onset of the Covid-19 is a shock that has made digitalization a strategic issue that necessitates an urgent change in many business elements of banks such as customer relationships, communication channels, resource allocation, partnerships and financing. Further, it has stimulated redefining value proposition and collaboration/interaction among all financial institutions through digital platforms.
Practical implications
BMC can be used to explain decision-making and business processes of banks for exploring the effect of recent and/or unexpected developments in the business environment of an emerging economy. The results provide insights and recommendations to managers of financial institutions into the impacts of Covid-19 on banks’ operational and strategic processes. That allows financial institutions, including Fintechs, to use this information for taking precautions and proactive actions against shocks.
Originality/value
This study is an initial attempt to explore the impacts of the Covid-19 on banks in an emerging economy by using BMC. With that, this study contributes to the literature by explaining the effect of progression of digitalization in banking from a strategic business model perspective using a qualitative research method.
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Qiang Lu, Yang Deng, Xinyi Wang and Aiping Wang
As an effective tool to promote rational resource allocation and facilitate the development of green management practices such as enterprise digital innovation, the green credit…
Abstract
Purpose
As an effective tool to promote rational resource allocation and facilitate the development of green management practices such as enterprise digital innovation, the green credit policy has recently gained extensive attention. The purpose of this paper is to analyze the relationship between green credit policies and the digital innovation of enterprises, and to further explore the mechanism of action between them and their boundary conditions.
Design/methodology/approach
Based on micro-level data on Chinese firms from 2007 to 2019, this paper constructs a difference-in-differences (DID) model to investigate the impact and intrinsic mechanisms of green credit policies on firms' digital innovation and its boundary conditions, with the help of a quasi-natural experiment, i.e. the Green Credit Guidelines.
Findings
Green credit policies inhibit digital innovation and fail to compensate for innovation. The analysis of the mechanism shows that the implementation of green credit policies has a negative impact on digital innovation by increasing the financing constraints faced by firms, and has also a crowding-out effect on R&D investment, resulting in a disincentive to digital innovation. Further analysis reveals that the negative impact of green credit policies on digital innovation is more pronounced in state-owned enterprises, enterprises without financially experienced executives, and in the eastern regions of China.
Originality/value
This study provides empirical evidence to understand the effectiveness and mechanism of influence of green credit policies on enterprise digital innovation, providing also a basis to further improve green credit policies.
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Mohsin Shabir, Jiang Ping, Özcan Işik and Kamran Razzaq
This study investigates the relationship between corporate social responsibility (CSR) and financial performance of the banking sector from the prospective of emerging countries.
Abstract
Purpose
This study investigates the relationship between corporate social responsibility (CSR) and financial performance of the banking sector from the prospective of emerging countries.
Design/methodology/approach
This study obtained balance sheet and income statement data for 173 banks in 20 emerging countries from the Bankscope database from 2005–2018. The CSR-related data were taken from the Thomson Reuters ASSET4 database. Moreover, macroeconomic controls such as GDP per capita, inflation, and financial development are attained from the GFDD. The series of institutional quality indices (Political Stability, Rule of Law, Control of Corruption, Government Effectiveness, and Regulatory Quality) is obtained from the WGI. At the same time, national culture and bank regulation are attained from Hofstede Insights and Barth et al. (2013). We used the panel fixed-effects model in our baseline estimations, while 2SLS and GMM were applied to control for endogeneity.
Findings
The finding shows that CSR activities significantly improve bank performance, but the effect varies across the bank. Only environmentally friendly activities have shown a significant positive relationship with banking performance for CSR dimensions. However, the social and government dimensions did not significantly affect bank performance. Moreover, a sound institutional and regulatory environment and national norms play an important role in the nexus of CSR activities and bank performance.
Originality/value
This study provides empirical evidence that sheds light on CSR and bank performance in an emerging market context.
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Mugabil Isayev and Omar Farooq
This paper aims to document the impact of shadow banking on non-performing loans (NPLs) of publicly listed banks in an international setting.
Abstract
Purpose
This paper aims to document the impact of shadow banking on non-performing loans (NPLs) of publicly listed banks in an international setting.
Design/methodology/approach
This paper uses the data from 27 countries and various estimation strategies to test the arguments presented in this paper. The sample covers the period between 2002 and 2020.
Findings
The empirical results suggest that banks headquartered in countries with high shadow banking activity have fewer NPLs than otherwise similar banks headquartered in countries with low shadow banking activity. The findings remain qualitatively the same in different sub-samples and after replacing the main variables with their alternate proxies. The paper also shows that this relationship is sensitive to bank-specific characteristics. Moreover, the paper also indicates that the stringency of banking regulations weakens the relationship between shadow banking and NPLs.
Research limitations/implications
The study’s data limitations prevent a detailed year-by-year analysis of NPLs and shadow banking, restricting insights into their evolving dynamics. In addition, the focus on country-level shadow banking data limits the exploration of how multinational banks’ activities in various jurisdictions impact individual banks’ NPLs.
Originality/value
The paper not only documents the effect of shadow banking on NPLs but also shows that the relationship between shadow banking and NPLs weakens as banking regulations become more stringent.
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Shweta Jha and Ramesh Chandra Dangwal
This paper aims to conduct a systematic literature review on the fintech services and financial inclusion of the developing nations that particularly focuses on lower…
Abstract
Purpose
This paper aims to conduct a systematic literature review on the fintech services and financial inclusion of the developing nations that particularly focuses on lower middle-income group nations (LMIGN) and upper middle-income group nations (UMIGN) to highlight the research areas that have not received attention and present opportunities for future research.
Design/methodology/approach
This paper adopts a systematic approach to examine 65 research articles published from 2016 to 2021, adhering to the Preferred Reporting Items for Systematic Reviews and Meta-Analyses guidelines.
Findings
The study identifies research gaps in two key themes: backward and outward linkages. In backward linkages, the literature on UMIGN should pay attention to the behavioural patterns associated with lending, investment and market provision-related fintech services. Further research is needed to understand the relationship between fintech services on the usage and quality dimension of financial inclusion in both LMIGN and UMIGN. For outward linkages, future research work should explore the role of fintech and financial inclusion in the development of LMIGN. This study provides valuable insights and guides future research directions by comprehensively mapping the existing studies.
Research limitations/implications
This study does not use quantitative tools, such as meta and bibliometric analysis, to validate the findings.
Originality/value
This research paper offers new perspectives that introduce a novel framework for analysing literature on fintech, financial inclusion and its impact on the overall development of UMIGN and LMIGN.
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Haitian Wei, Rasidah Mohd-Rashid and Chai-Aun Ooi
As a consequence of the proposal of the Carbon Neutral and Carbon Peak policy in 2020, the Chinese Government is paying more attention to developing sustainability performance…
Abstract
Purpose
As a consequence of the proposal of the Carbon Neutral and Carbon Peak policy in 2020, the Chinese Government is paying more attention to developing sustainability performance. This study aims to assess the direct influence of country-level and corporate anti-corruption measures on environmental, social and governance (ESG) and its three dimensions, besides ascertaining the moderating role of firm size.
Design/methodology/approach
This study used the system generalized method of moments on a sample of 820 Chinese listed firms from 2012 to 2021.
Findings
The findings show that country-level and corporate corruption negatively affect ESG performance. Corporate anti-corruption measures have a more pronounced positive influence on the sustainability performance of small firms than large firms due to the limited resources, lower political position and weaker refusal power of small firms.
Research limitations/implications
The study has great implications for governments, corporate boards and ESG rating agencies. Government and corporate boards should mitigate the risks of country-level and corporate corruption to attain sustainable development goals. Rating agencies should add country-level and corporate corruption into the ESG evaluation system.
Originality/value
Some empirical results have proven that anti-corruption measures help reduce the emission of carbon dioxide, but few evidence shows how country-level and corporate corruption affect ESG and its three dimensions.
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Dini Rosdini, Ersa Tri Wahyuni and Prima Yusi Sari
This study aims to explore credit scoring regulations, governance, variables and methods used by peer-to-peer (P2P) lending platforms in key players of the Association of…
Abstract
Purpose
This study aims to explore credit scoring regulations, governance, variables and methods used by peer-to-peer (P2P) lending platforms in key players of the Association of Southeast Asian Nations (ASEAN) region’s P2P, Indonesia, Malaysia and Singapore.
Design/methodology/approach
This study explores the P2P Lending characteristics of the three countries using qualitative literature review, interview, focus group discussion and desk research.
Findings
This study concludes that the credit scoring variables used by the countries’ companies are almost the same. Key drivers of the differences are countries’ regulations, management/business core value and credit scoring data processing methods.
Practical implications
Ultimately, this research provides a comprehensive view for investors, businesses and researchers on the topic of ASEAN credit scoring governance and will help them navigate the complexities and improve their awareness on the importance of credit scoring governance in P2P lending companies.
Originality/value
This research provides an in-depth perspective on how P2P lending companies, credit scoring governance and regulations in the biggest three countries in Southeast Asia.
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Dhruba Kumar Gautam and Prakash Kumar Gautam
This study examines the effect of occupational stress on turnover intention of employees working in the banking industry. The authors examine the mediating effects of service…
Abstract
Purpose
This study examines the effect of occupational stress on turnover intention of employees working in the banking industry. The authors examine the mediating effects of service climate and emotional regulations of the employees in the relationship between occupational stress and intention to leave the organization.
Design/methodology/approach
This study followed stratified sampling technique for data collection from employees of ten commercial banks based on the banks' financial performance of top 5 and bottom 5 out of 27 banks. Data were collected at 2 stages, first from 465 employees for occupational stressors and second from 408 employees among the participants in the first stage for turnover intention, service climate and emotional regulation. Harman’s one-factor test was conducted to examine the common method bias. Confirmatory factor analysis (CFA), regression analysis and Preacher and Hayes Process Macro approach were used to examine mediation effect.
Findings
Three factors, namely workload (WL), role ambiguity and growth opportunity expectations were identified as the occupational stressors in the banking industry, predicting a positive relation of overall occupational stress to the intention to turnover. Service climate and the employees’ emotion regulation ability mediate the relationship between stress and turnover intention. Results also revealed no significant role of control variables in predicting occupational stress and turnover intention.
Practical implications
This study implies that the WL, role ambiguity and growth opportunity expectations of the employees cause stress in employees which may lead to have turnover intention. In order to get success in competitive environment, managers of banking industry can address stressors by enhancing service climate and formulating policies and programs to strengthen the emotion regulation which is evidence to strengthen the reciprocity approach of social exchange theory in employees’ commitment.
Originality/value
This study contributes to the social exchange theory and attempts to fulfill the gaps in empirical research on personnel psychology, human capital\ and organization management in developing countries.
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