Search results

This paper aims to investigate the impact of capital requirements and bank competition on banks' risk-taking behavior in the Middle East and North Africa (MENA) region.

The study combines both descriptive and analytical approaches. It considers panel data sets and adopts panel data econometric techniques like fixed effects/random effects and generalized method of moments estimator.

Regulatory capital and market competition have different effects according to the bank’s type (Islamic or conventional). The results show that the capital adequacy ratio has a significant impact on the credit risk of conventional banks (CBs) while this effect is irrelevant for Islamic banks (IBs). However, market competition plays a significant role in shaping risk-taking behavior of Islamic banking institutions. Our results indicate that banks with strong market power may pursue risky strategies in the face of increased regulatory pressure (e.g. increased minimum capital requirements). The results were robust to alternative profitability measures and endogeneity checks.

The most important limitation is the lack of data for some banks and years, and this paper had to exclude some variables because of missing observations. The second limitation concerns the number of IBs in the sample. However, this can be overcome by including more countries from MENA and other regions where Islamic banking is a growing phenomenon.

Our findings call for a change in Islamic banking’s traditional business model based on the prohibition of interest. The analysis indicates that market concentration moderates the association between capital requirements and the insolvency risk of IBs but not CBs. Therefore, regulatory authorities concerned with improving financial stability in the MENA region should set up their policies differently depending on the level of banking market concentration. Finally, bank managers are requested to apply a more disciplined approach to their lending decisions and build sufficient capital conservation buffers to limit the impact of downside risk from the depletion of capital buffers during the pandemic.

This study addresses banks’ risk-taking behavior and stability in the MENA region, which includes banks of different types (Islamic and conventional). This paper also contributes to the literature on bank stability by identifying the most critical factors that affect bank risk and stability in the MENA region, which can be relevant in the context of the new global (COVID-19) crisis.

This study aims to explore the possibility that securities markets in selected African countries of Egypt, Kenya, Nigeria and South Africa play a significant role in capital accumulation using panel data analysis. This is done by exploring the relationship between gross fixed capital formation on the one hand and financial market development indicators on the other hand. Thus, the study aims to examine if stock market size and liquidity are determinants of capital accumulation.

The analysis is based on annual times series from 1991 through 2017 spanning four African stock markets. The analysis utilizes the fixed-effect and random-effect econometric models. The Durbin–Wu–Hausman test is used to choose between the two models.

The key results indicate that stock market capitalization is a positive determinant of gross fixed capital formation. The market value traded and turnover have no relationship with capital formation. Therefore, the role of stock African stock markets in promoting capital accumulation and, subsequently, industrial growth in Africa is seriously questioned.

Only a handful of studies have examined the role of the African securities market in promoting capital accumulation. This study is unique in which it focuses on the leading stock markets in the four corners of Africa. The markets are from Egypt in the north, South Africa from the south, Nigeria from the west and Kenya from the east. These four markets account for a significant segment of all African markets.

The purpose of this paper is to investigate how customer relationship management (CRM) implementation affects internal capital allocation efficiency, the efficiency with which a firm allocates its capital across its business segments.

The authors use a statistical regression method to analyze a sample of 801 unique firms in the USA from COMPUSTAT and the Computer Intelligence database. This analysis examines the relation between CRM implementation and internal capital allocation efficiency and identifies the conditions under which firms benefit more from CRM implementation. They also use instrumental variables (IVs) to address endogenous concerns with a two-stage least squares (2SLS) model.

The authors find that CRM implementation is positively related to internal capital allocation efficiency. The results are robust to the 2SLS analysis with IVs. This positive relation is more pronounced for firms with effective internal control and for those operating in highly competitive markets.

The research implies that that CRM can have a significant cross-functional effect on corporate financing and budgeting. This also suggests that when chief marketing officers plan marketing initiatives and implement CRM, they should communicate to chief financial officers not only the direct effect but also the indirect strategic benefits of such initiatives to a firm.

The authors reveal a previously overlooked aspect of marketing accountability by suggesting marketing’s impact on internal capital markets. They also enrich the body of literature on CRM benefits by showing a cross-functional benefit from marketing to finance (or capital allocation).

The purpose of this study is to probe into the influence mechanism of financial opening onto industrial restructuring from the prism of financial development and examine the role of the credit market, capital market and currency market in transmitting the impact of financial opening onto industrial restructuring in both developed countries and developing countries.

In the theoretical model, the indicator of financial opening was introduced in Cobb–Douglas production function formula. Using constant elasticity of substitution utility function, based on Engel’s law, the optimal industrial structure in the economy was concluded. For the empirical analysis, data was collected from 36 developed countries and 34 developing countries during the period 2000 to 2019. Multiple mediator models with bootstrap techniques were used to identify the linkage between financial opening, financial development and industrial restructuring.

First, there is a U-shaped relationship between financial opening and industrial restructuring. Second, financial development plays a mediating role in transmitting the effects of financial opening onto industrial restructuring mainly through the credit market at the global level. Third, developed countries are in a trend of “reindustrialization,” while developing countries show a trend of “premature deindustrialization.” Moreover, for developed countries, the capital market leads to reindustrialization, while the credit market and currency market contribute to deindustrialization. For developing countries, the capital market and credit market lead to deindustrialization, while the currency market contributes to industrialization.

Unlike most previous researches, this paper focuses on examining three-variable relationship between financial opening, financial development and domestic industrial restructuring. Against the backdrop of the pandemic, monetary policy shifts of developed economies have led to an increase in cross-border capital flows, which will lead to the increasing risks for international financial markets and the reallocation of the global value chain. It is of great significance to clarify the linkage between these three variables in the face of a volatile international financial environment.

Scholars have emphasized intellectual capital’s importance for universities in obtaining competitive advantages and creating value. The purpose of this paper is to identify the influences of two components of intellectual capital, relational and human capital at the international level, and psychological capital on international orientation of academic entrepreneurs, and the mediating effects of international relational and human capital.

On the basis of a literature review, a theoretical model is proposed to explain the relationship between the studied variables. Our hypotheses are tested on a sample of 173 academic spin-offs of Spanish universities using bootstrapping methodology.

The results show that the international market relational capital and international human capital of academic entrepreneurs influence their international orientation, and that their psychological capital is directly, and indirectly, related to international orientation through international human capital and international market relational capital.

This study provides a better understanding of the antecedents of the international orientation of academic entrepreneurs, which would provide an important contribution to the literature on intellectual capital, academic entrepreneurship and internationalization. The achieved results highlight important implications for training of academic entrepreneurs and for managers and management teams of companies willing to enter, or even those already operating in, international markets.

In this study, the international orientation of academic entrepreneurs is explained through the psychological capital that is studied jointly with two components of intellectual capital, relational and human capital at the international level. Although some recent work has focused on the study of the internationalization of academic spin-off, this line of research is still incipient.

Motivated by recent financial liberalization policies in emerging markets, this study investigates whether bank competition and regulatory capital affect bank risk taking in an international banking context.

Bank competition is regressed, using GLS regression, on various measures of bank risk, to reflect regulatory, accounting and market-based risk-taking. The authors use a sample of publicly traded banks operating in Africa during 2004–2019.

Results show that higher level of bank competition increases bank risk taking and results in greater financial fragility in the absence of banking capital regulations. Furthermore, larger capital adequacy ratios control the risk-taking incentives of managers and guard banks against the risk of default. Further tests confirm the significance of market-based risk measures over accounting and regulatory measures.

Findings are relevant to bank managers and regulators in their sustained effort of finding an optimal balance between bank competition and financial stability. Increased competition should be balanced with capital regulations to curtail bank excessive risky behavior and derive the social benefits of greater competition in the market while sustaining overall economic growth.

This study provides novel evidence in an international context. First, it uses regulatory, accounting and market-based measures of bank risk taking to reflect regulators', management and market participants' emphasis. Another original contribution is the investigation of bank competition across African economies characterized by financial liberalization, stringent banking system and interesting socio-economic challenges.

This study aims to investigate the key roles of human and relational capital in the export orientation and competitiveness of knowledge-intensive cooperative companies. It is also aimed to examine the moderating role of marketing knowledge capabilities.

Data from 552 managers at 86 companies, selected from knowledge-intensive export cooperatives, were analyzed with structural equation modeling with the partial least squares approach.

Results indicate that both human and relational capital exert considerable effects on competitiveness. Export orientation was a driving factor for cooperatives’ competitiveness. Human and relational capital fostered the effects of export orientation on competitiveness. Moreover, marketing knowledge capabilities were found to moderate the relationships between human and relational capital and export orientation, as well as between export orientation and competitiveness.

By highlighting the role of human capital and relational capital in export orientation and competitiveness, this study offers an analysis of important managerial processes within cooperative companies, which have not been sufficiently addressed in previous research. This research also demonstrated the moderating role of marketing knowledge capabilities in strengthening relationships between human and relational capital and export orientation, as well as between export orientation and competitiveness, which has been neglected in previous studies. These findings provide academics and practitioners with a new framework for examining the relationships between these constructs, which will enable them to establish strategies for achieving a competitive advantage.

The London office market is a major destination of international real estate capital and arguably the epicentre of international real estate investment over the past decade. However, the increase in global uncertainties in recent years due to socio-economic and political trends highlights the need for more insights into the behaviour of international real estate capital flows. The purpose of this study is to evaluate the influence of the global and domestic environment on international real estate investment activities within the London office market over the period 2007–2017.

This study adopts an auto-regressive distributed lag approach using the real capital analytics (RCA) international real estate investment data. The RCA data analyses quarterly cross-border investment transactions within the central London office market for the period 2007–2017.

The study provides insights on the critical differences in the influence of the domestic and global environment on cross-border investment activities in this office market, specifically highlighting the significance of the influence of the global environment in the long run. In the short run, the influence of factors reflective of both the domestic and international environment are important indicating that international capital flows into the London office market is contextualised by the interaction of different factors.

The authors provide a holistic study of the influence of both the domestic and international environment on cross-border investment activities in the London office market, providing more insights on the behaviour of global real estate capital flows.

Despite its potential as an emerging market for Islamic financial services, Uzbekistan has lagged in legislative support. This study aims to evaluate the feasibility of introducing an Islamic capital market (ICM) in Uzbekistan, preceding a broader industry establishment.

The authors begin by assessing Islamic finance literacy and the potential demand for ICMs in Uzbekistan. The authors then scrutinize Uzbekistan’s capital market legislation and its readiness. This analysis uses primary data, including surveys and interviews, and secondary data from literature and financial legislation.

This study highlights a significant demand for ICMs, despite low Islamic finance awareness in Uzbekistan. Presently, Uzbekistan’s capital market development is lacking, with regulations not yet suitable for ICMs. As a result, legal and operational enhancements are needed.

The authors provide essential policy recommendations for authorities and practitioners to facilitate the effective launch of ICMs and enhance Uzbekistan’s capital market stature.

To the best of the authors’ knowledge, this is the first study offering an in-depth analysis of the potential and feasibility of ICMs in Uzbekistan.

Fiscal and monetary policies are essential to the development of a capital market. In this chapter, authors present how fiscal and monetary policy in Poland evolved and adjusted to economic challenges in 1998–2022. It is worth noticing that the Polish economy and financial market have been built from scratch after 45 years of socialism. Hence, it is scientifically interesting to study the relationship between fiscal and monetary policy, and capital market in a developing country, and in a relatively young economy.

Both – the macroeconomic policy mix and development of the capital market – are the subject of analysis how fiscal and monetary policy impacted the capital market. As so the main aim of the chapter is the assessment of the nexus and dependencies between fiscal and monetary policy and the capital market.

In the chapter, multiple linear regression was used for each dependent variable to discover which monetary and fiscal policy parameters significantly predicted selected variables describing the development of the capital market in Poland. Fiscal and monetary policy variables served as descriptors explaining capital market parameters in seven separate models.

Multiple regression models explain 77.3%–95.4% of the volatility of the capital market characteristics. The level of the central bank's reference rate is a variable that influences the capital market the most. In six out of seven models, the interest rate was a significant parameter. The development of the capital market was accompanied by a higher tax-to-GDP ratio. At the same time, a strong negative impact of the tax-to-GDP increase was noticed in domestic institutional investors' stock trading.