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This study aims to decompose financial development into its three key components (depth, access and efficiency) to investigate whether they can help to overturn the negative impact of foreign direct investment (FDI) on the environment.

The study uses a dynamic panel of 43 economies from 1982 to 2018 and decomposed financial development into its three key components: depth, access and efficiency.

The results from the various estimations indicate that financial deepening and efficiency reduce environmental risk and can overturn the negative impact of FDI on the environment. In addition, the study finds that low levels of financial access worsen environmental risk but doubling financial access is likely to reduce it which makes the relationship between access and environmental risk non-monotonic. After splitting the data set into high and low financially developed economies, the study reports that FDI is more environmentally depressive among low financially developed economies.

The practical implications are that improvement in financial efficiency guarantees high returns on savings and investment and can reduce environmental risk. So, central governments should invest in financial technologies and formulate financial regulations through monetary and fiscal policies to enhance financial efficiency and depth.

If inward FDI to Africa continues the business-as-usual trend, the environmental risk in the region may continue to rise, environmental conditionalities for FDI must be strengthened.

The study uses a comprehensive measure of financial sector development and decomposes financial development indicators to assess their efficacy in mitigating the relationship between FDI and environmental quality.

The purpose of this study is to examine how banking regulation and supervision affect the performance of microfinance institutions (MFIs). It proposes performance of the MFIs from the aspect of social and financial efficiency because the MFIs nowadays not only view to sustain the social role of poverty eradication but in the same time they must strive the financial sustainability to maintain the operation in long run. This study also includes the macroeconomic condition and firm level variables to control for social and financial efficiency of the MFIs.

The data consists 168 MFIs from five countries in Southeast Asia from year 2011 to 2017. First stage of analysis is to identify level of social and financial efficiency by using data envelopment analysis approach. Second stage is to examine impact of bank regulation and supervision to the social and financial efficiency by applying panel regression analysis and generalized method of moments for robust estimation methods.

The finding shows the MFIs own lower social efficiency and higher score in financial efficiency. This indicates in pursuing financial sustainability, the MFIs in Southeast Asia countries have lost sight of their original mission of poverty reduction. Furthermore, the result also presents a significant impact of bank regulation and supervision to the social and financial efficiency of the MFIs. However, the results appear in different direction when more negative effect is associated with social efficiency. This specifies that bank regulation and supervision are not appropriate to accommodate the social needs, thus hampering the effort of poverty reduction by the MFIs.

The present study only concentrates on the impact bank regulation and supervision to the performance of the MFIs. As the operation of the MFIs currently has been largely exposed in banking operation, it is suggested that future studies to look for other special issues such as country governance that might influence specifically in social and financial aspect of the MFIs.

The empirical findings from this study could be useful and may have significant implications for the regulators. The regulators or policymakers could establish the new regulation framework that fulfil the dual needs (social and financial) of the MFIs. Furthermore, the empirical findings also could serve as guidance to regulators and decision-makers in designing new policies for a sustainable and competitive sector of the MFIs. Although the MFIs recently brings a similar role as commercial banks, they need to retain the social aspects as that is the original mission of the MFIs

The present study proves that the bank regulation and supervision have brought a significant influence to the performance of the MFIs in ASEAN 5 countries.

Microfinance institutions (MFIs) play a significant role in society to help low-income consumers that liaise with sustainable development goals. Therefore, the purpose of this paper is to examine the effects of two economic freedom components, namely, regulatory efficiency on business freedom and monetary freedom; and market openness on investment freedom and financial freedom. Their influence on the efficiency of MFIs in both social and financial ways is examined.

This study collected a total of 88 MFIs from Thailand and the Philippines for the years 2011 to 2017. The data envelopment analysis approach has been used to measure the MFIs’ efficiency level. Then, the ordinary least squares and generalised least square estimation methods serve to analyse the effects of economic freedom and other determinants on efficiency.

The results show that overall MFIs operate at an encouraging level. However, they were managerially inefficient when exploiting resources to achieve both social and financial efficiency. Therefore, MFIs should focus more on managerial operations to improve the level of efficiency. Results from panel regression analysis showed a mixed outcome for the relationship between economic freedom and MFIs’ efficiency both financially and socially. This suggested that different freedoms will result in different outcomes and significantly influence MFIs’ financial and social efficiency.

Regulatory efficiency and market openness are the vital aspects of economic freedom components that may significantly influence MFI’s performance specifically on social and financial efficiency. This study fills the research gap by examining the relationship between economic freedom components and specific MFIs’ social and financial efficiency, to ensure MFIs work to achieve sustainable development goals.

This paper seeks to explore empirically the relationships between efficiency, financial performance and customer service quality among a representative cross‐section of Australian banks and credit unions and the correlations between these categories of measures. In particular, it seeks to explore the strength of the relationship between efficiency, financial performance and service quality. Results show that all financial performance measures (interest margin, expense/income, return on assets and capital adequacy) are positively correlated with customer service quality scores. In contrast, the absence of a consistently positive relationship between efficiency and financial performance suggests that financial institutions that pursue improved financial performance through the single‐minded pursuit of lower costs may be fundamentally misguided.

The purpose of this paper was to investigate the impact of credit risk-taking on financial and social efficiency and examine the relationship between credit risk, capital structure and efficiency in the context of Islamic microfinance institutions (MFIs) compared to their conventional counterparts.

The stochastic frontier approach was used to estimate the financial and social efficiency scores, in a first step. In a second step, the impact of risk-taking on efficiency was evaluated. The authors also took into account the moderating role of capital structure in this effect using the fixed and random effects generalized least squares (GLS) with a first-order autoregressive disturbance. The used dataset covers 326 conventional MFIs and 57 Islamic MFIs in six different regions of the world over the period of 2005–2015.

The overall average efficiency scores are less than 50%, where CMFIs could have produced their outputs using 48% of their actual inputs. IMFIs record the lowest financial (cost) efficiency that is equal to 28% on average. The estimation results also reveal a negative impact of nonperforming loan on financial and social efficiency. Finally, the moderating effect of leverage funding on the relationship between credit risk-taking and financial efficiency was confirmed in CMFIs. However, leverage seems to moderate the effect of risk-taking behavior on social efficiency for IMFIs.

This paper makes an initial attempt to evaluate the effect of risk-taking decision and its implication on efficiency and MFIs' sustainability. Besides, it takes into consideration the role played by the mode of governance through the ownership structure. In addition, this research study sheds light on the importance of the financial support for the development and sustainability of these institutions, which in return, contributes to a sustainable economic development.

Financial flexibility and investment efficiency are of vital importance in strategic choices at boardrooms, particularly in post-crisis recovery strategies. This study examines the moderating effects of investment efficiency and investment scale on the relationship between financial flexibility and firm performance.

The authors use sample of 10,755 US-listed firms over the period 2010–2021 to examine the relationships between investment scale, investment efficiency, financial flexibility and firm performance. Particular attention is paid to overinvestment and underinvestment.

Findings of this study reveal that financial flexibility mitigates investment inefficiency through reducing overinvestment. Financial flexibility contributes to boost a firm’s accounting and market performance. Additionally, investment efficiency and investment scale have moderating effects on the relationship between financial flexibility and firm performance. However, the influence of investment efficiency is greater than the influence of investment scale. Finally, the authors find that the direct and indirect effects of financial flexibility are stronger on market performance than accounting performance, implying that market is more sensitive to corporate financial policies.

Findings of this study have implications for scholars, decision-makers policymakers, investors and other stakeholders.

This study has its own limitations due to the sample selection issues, country context and the research model adopted by this study.

The novel contribution to the extant literature is incorporating the influence of investment scale and investment efficiency into the relationship between financial flexibility and firm performance.

The study examines the effect of macroeconomic risk, inflation uncertainty and instability associated with key macroeconomic indicators on the efficiency of financial institutions among economies in sub-Saharan Africa (SSA).

Data for the empirical inquiry were compiled from 35 SSA economies from 1996 to 2019. The empirical estimates were carried out using pooled ordinary least squares (POLS) with Driscoll and Kraay’s (1998) standard errors.

Reported empirical estimates show that macroeconomic risk and exchange rate volatility constrain the efficiency of financial institutions. Further results suggest that inflation uncertainty has a significant influence on the efficiency of financial institutions among economies in the subregion. Additionally, reviewed empirical estimates show that institutional quality positively moderates the nexus between inflation uncertainty and financial institution efficiency. At the same time, political instability is found to worsen the adverse effect of macroeconomic risk on the efficiency of financial institutions.

For policymakers and governments, improved institutional structures are recommended to ensure the operational efficiency of financial institutions, especially during an inflationary period. For decision-makers among financial institutions, the study recommends policies that have the potential to make their institutions less vulnerable to macroeconomic risk and exchange rate fluctuations.

The approach adopted in this study differs significantly from related studies in that the study examines and reviews interactions and relationships not readily found in the reviewed literature.

This study is aimed to measure the intertemporal financial efficiency of 16 emerging economy countries (BRICS and N-11) and further to investigate the mechanisms of financial development on energy efficiency covering the period 2008–2020.

The dynamic data envelopment analysis model is used to measure financial efficiency dynamically. The generalized method of moments is used to investigate the effects of financial efficiency on energy efficiency. In the proposed approach, energy efficiency is the dependent variable, whereas financial efficiency, GDP per capita, industrial structure upgrade index, urbanization level and export trade structure are the regressors. Generalized moment estimation is performed.

There is heterogeneity in the level of financial development at different stages of economic development. The impact of financial efficiency on energy efficiency is related to the type of industries to which financial institutions are allocated. With the financial development of emerging economies, enterprises in technology-intensive industries are becoming the main contributors to higher profits for financial institutions, the products and results of these enterprises reduce energy consumption and increase energy efficiency. In addition, residents with rising levels of wealth holdings prefer low-carbon and environmentally friendly products, which indirectly improves energy efficiency. Per capita GDP and urbanization have no significant impact on the energy efficiency of emerging economies. The optimization and upgrading of the industrial structure of emerging economies has played a role in promoting energy efficiency. The export trade structure has a restraining effect on energy efficiency.

The findings contribute value by supporting a positive link between Financial Development and Energy Efficiency in the emerging economies. Enterprises in technology-intensive industries have gradually become the main force that brings higher profits to financial institutions. The products and achievements of these enterprises will reduce energy consumption and improve energy efficiency. The findings of this study provide emerging economies with an objective view of their financial development and energy efficiency, while also providing governments and policymakers with ways to improve energy efficiency and achieve sustainable development.

Measuring the success of microfinance institutions (MFIs) using a single efficiency value and then exploring its determining factors might be misleading. Hence, this study decomposed the efficiency measure into three divisions, namely operational, financial sustainability and social outreach. Subsequently, the authors identified factors affecting these efficiencies in the second stage regression analysis.

This study employed the network data envelopment analysis approach to evaluate each division of efficiency of 90 MFIs from 2013 to 2018 and used second-stage regression techniques (Tobit and Truncated) to examine the effect of institutional factors.

The authors’ efficiency analysis revealed that financial sustainability and social outreach were responsible for the low overall efficiency. The second stage analysis revealed the negative influence of institutional factors such as efficiency wage (particularly among small MFIs) on financial sustainability, social outreach and overall efficiencies. Staff turnover reduced operational, financial and overall efficiencies, particularly for large MFIs. The presence of female board members and staff improved the efficiency of MFIs, thus highlighting the pivotal role of women in the success of MFIs. Besides, the effects of regional location of MFIs, regulation and legal status on efficiencies were further discussed.

The study has uniquely evaluated three different types of efficiency in MFIs and employed conventional techniques for the second-stage regression to identify the determinants of efficiency. The findings will enable managers to make appropriate decisions to enhance their organisational efficiency.

The purpose of this study is to evaluate whether focus on social output affects the efficiency of MFIs. Inclusive growth is the key developmental aim for many developing countries, including India. The role of microfinance institutions (MFIs) in promoting financial inclusion is widely applauded. However, to achieve financial sustainability, MFIs have become highly commercialised and are seen to have drifted away from their social mission. Various studies have shown the efficiency of MFIs on financial parameters. MFIs being a social enterprise, it is important to include social output among the efficiency parameters.

This study attempts to compare the efficiency of MFIs with and without social performances across the various size of MFIs based on their asset, i.e. large, medium and small. This study uses Data Envelopment Analysis (DEA) for assessing an MFI’s efficiency. For calculating the social output score, the Gutman Scale is used. Efficiency is calculated with and without social output, and the resulting scores are compared to assess the impact of social performance on the efficiency of MFIs.

The results of this study allow us to conclude that with the inclusion of social output, the efficiency of MFIs improves across various categories. In terms of social performances, it is concluded that MFIs are targeting women and mostly working in rural areas but have neglected issues like health and education.

The findings of this study will help MFIs in formulating their mission and vision statements and in achieving the objective of financial inclusion without experiencing mission drift.