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This paper aims to provide new empirical evidence on the non-performing loan (NPL) determinants of the EU conventional banks, in the context of macroeconomic factors, dimensions of country governance and bank-specific characteristics.

The panel data sets of 1,053 conventional banks were obtained over the period of 2007-2016. The Hodrick–Prescott filter was adopted to extract business cycle and credit cycle from real gross domestic product and credit to the private non-financial sector, correspondingly. System-generalised methods of moment was then used to identify the significant determinants of NPL.

The empirical results reveal that NPL is primarily driven positively by lagged-one NPL and risk profile. In consonance with the skimping hypothesis, NPL has a significant positive relationship with the cost efficiency. The empirical finding of the business cycle coincides with the Austrian business cycle theory. Particularly, NPL is relatively low during rapid economic growth of credit-sourced business boom. Whereas, business bust happens when credit creation runs its course and is associated with high NPL. This paper encapsulates that NPL is driven by not only macroeconomic factors and bank-specific characteristics but also the dimensions of country governance.

Policymakers should introduce policies that are geared towards proper dimensions of country governance.

The novelty of this research does not rely on the multidimensions of NPL determinants but on the disentanglement of the conventional banks with dual identity (i.e. Islamic banks, cooperative banks and ethical banks). It considers business cycle, credit cycle and previous NPL as the potential determinants.

Financial inclusion is a critical component of financial development, which disseminates accessible financial services to benefit all parts of society and consequently promotes economic growth. The study explores the dynamic common correlated effects of financial inclusion on economic growth in Organization of Islamic Cooperation (OIC) countries.

The conventional econometric techniques overlook heterogeneity and cross-sectional dependence and provide false results. Hence, a unique methodology, ‘Dynamic Common Correlated Effects (DCCE)’, is used, which can efficiently tackle the above-mentioned issues.

The DCCE estimation indicates a positive and significant impact of financial inclusion on economic growth in overall and higher-income OIC economies. Moreover, in the lower-income OIC group, financial inclusion is inversely correlated with economic growth, which converts into a positive linkage by including an interaction term of financial inclusion and institutional quality.

Based on the research outcomes, it is recommended that policymakers and governments of OIC economies seek to increase financial inclusion to achieve sustainable, optimal and inclusive economic growth.

The DCCE technique in this study considers heterogeneity and cross-sectional dependence among countries and thus provides robust findings.

The purpose of this paper to examine if there is continuous macroeconomic compatibility between ASEAN‐5 and China. Thus, in addition to the typical VECM test of the long run macroeconomic cointegration test, this paper examines the existence of an ongoing cointegration analysis.

The degree of convergence during different sub‐sample period of the full sample is employed, via Johansen cointegration rank tests, to examine if there is evidence of ongoing and improved cointegrating relationship among the economies.

A successful ASEAN‐China economic cooperation would only work if there is continuous macroeconomic interdependence between the partnership. Since a smooth transition of ACFTA will complement AFTA, the effective ASEAN‐China coordination plan is essential to endorse a successful ASEAN‐China coalition.

This paper suggests a quick yet effective verification on the continuous compatibility of economies intended to have a long‐term economic coordination.

The purpose of this paper is to find the meaningful relationship between the economic impact of the natural disaster and economic condition.

The paper employed cross‐sectional analysis to investigate the relationship between economic condition namely, gross domestic product per capita (GDPpc); gross domestic product per capita squared (GDPpc²); government consumption ratio to GDP (gc); ratio of M2 over GDP(M2); years of schooling attainment (sc); land area and finally; population and the economic impact of natural disasters, whereby ten types of natural disasters were chosen. The degree to which the human and economic losses due to these ten natural disasters were measured by, the variables selected are, number of killed; total affected; and ratio of total damage to GDP. Three different points of time were regressed, namely, 1985, 1995, and 2005 covering 73 countries.

Results clearly indicate that there seems to be meaningful relationship between the economic impact of natural disasters and economic conditions.

The paper provides some evidence on the important role of economic condition in minimizing the impact of natural disasters.

The paper incorporates a comprehensive list of explanatory variables in accounting for natural disaster fatalities.

The purpose of this paper is to analyze the influences of real share prices on aggregate consumption for Malaysia with the focus on whether there is asymmetry in the long‐run relation of the two variables.

The paper specifies aggregate consumption to depend on real income and real share prices. Alternatively, imposing long‐run budget constraint, the paper specifies the relation between aggregate consumption and real share prices as ratio to real income. Then, it applies an asymmetric cointegration and error correction modeling.

The cointegration tests indicate the presence of a long‐run relation between consumption‐income ratio and share price‐income ratio. More interestingly, while changes in share prices exert short‐run causal influences on Malaysia's private consumption, evidence is found for the adjustments of consumption – income ratio to the long‐run equilibrium path only when it is above its long‐run value. The paper interprets the finding as suggesting downward revisions in the consumption patterns when there are adverse shocks in share prices and, accordingly, supports the existence of especially negative wealth effect for Malaysia.

Owing to data limitations, the paper relies on aggregate consumption and aggregate income data. It acknowledges that the sum of non‐durable consumption and flow‐of‐services from durable purchases and labor income are more appropriate measures of, respectively, consumption and real income.

The findings have important implications for understanding consumption behavior in a developing country and can provide insight on the effectiveness of monetary policy.

The purpose of this paper is to relate the quality of governance with crime in Malaysia. The study also identifies the best good governance tool to fight against crime in Malaysia.

The study uses time-series data on crime rates and six measures of governance: voice and accountability, political stability, government effectiveness, regulatory quality, rule of law and control of corruption. In this study the authors employed the popular autoregressive distributed lagged modeling approach to estimate the long-run model of crime and governance.

The authors test the hypothesis that good governance lowers crime rates (total crime, violent and property crimes). The results suggest a negative relationship between crime rates and good governance in Malaysia. This suggests that good governance reduces crime rates in Malaysia.

The limitations of this study is the short time-series used in the analysis which is from 1996 to 2009.

This study provides evidence that the practice of good governance, for example, lower corruption, good policing and judicial system can mitigate crime in Malaysia.

The implementation of good governance will protect property right of individuals, business sector and the society as a whole, and this will enhance prosperity of a nation.

This study provide the first empirical evidence that linking between crime and good governance in Malaysia.

The purpose of this paper is to analyze the impact of economic conditions on various categories of criminal activities in Malaysia for the period 1973‐2003.

The autoregressive distributed lag bounds testing procedure was employed as the main tool. Dynamic ordinary least squares was also used to check the robustness of the results.

The results indicate that murder, armed robbery, rape, assault, daylight burglary, and motorcycle theft exhibit long‐run relationships with economic conditions, and the causal effect in all cases runs from economic conditions to crime rates and not vice versa. In the long‐run, strong economic performances have a positive impact on murder, rape, assault, daylight burglary, and motorcycle theft, while on the other hand, economic conditions have negative impact on armed robbery.

Further researches using other macroeconomic variables and also other countries are encouraged.

The important implication of this result is that real gross national product per capita is an exogenous variable and it is, therefore, useful for fiscal policy variable. Government of the day should seriously consider the results of this study in any crimefighting policies that are formulated.

An economic viewpoint of criminal activities in Malaysia.

Banks are important sources of external credit but they are reluctant to lend to small and medium enterprises (SMEs) due to the high credit risk involved. Therefore, Credit Guarantee Corporation (Malaysia) Limited (CGC) was set up to assist SMEs to secure loans from financial institutions in Malaysia. Being the sole issuer of credit guarantees to SMEs, the performance of CGC directly reflects the availability of credit guarantees to SMEs. Hence, to ascertain the accessibility of credit guarantees, this study evaluates the efficiency of credit guarantee schemes provided by CGC. From a non‐parametric analysis, CGC is found to be operating at a relatively low level of overall technical efficiency. Therefore, CGC should consider reallocating its existing inputs as well as increase the amount of credit guarantees granted to SMEs in order to achieve a reasonable level of efficiency.

The paper aims to explore the impact of economic freedom on the efficiency of the Malaysian banking sector.

The analysis is confined into two stages. In the first stage, the bias-corrected data envelopment analysis method is used to compute the efficiency of individual banks. Then bootstrap regressions are used to examine the impact of economic freedom on bank efficiency, while controlling for the potential impacts of contextual variables.

It was found that greater freedom to start new businesses tend to impede the efficiency of banks operating in the Malaysian banking sector. The results indicate that restrictions on the activities of which banks could undertake exert negative impact on their efficiency levels. The empirical findings seem to support for official regulation and supervision of banks by setting the limits on activities which banks could undertake. In addition evidence supporting for government interventions in the foreign exchange and money markets was found.

The purpose of the present paper is to extend the earlier works on the performance of the banking sector in a developing economy and establish empirical evidence on the impact of economic freedom. Although empirical evidence which examines the performance of banking sectors is abundant in the literature, to the best of our knowledge, virtually nothing has been published to address the impact of economic freedom.

The purpose of the present paper is to empirically analyze the efficiency of the Thailand banking sector during the period of 1999‐2008.

The efficiency estimates of individual banks are evaluated by using the data envelopment analysis approach. The central tendency and parametric method based on the Tobit regression is employed to investigate the Thailand banking sector's production efficiency while controlling for the potential effects of internal (bank‐specific characteristics) and external (macroeconomic and industry specific) contextual variables. As a robustness check, following Banker and Natarajan among others, the second‐stage regression is also estimated by using the ordinary least square regression method, while the standard errors are calculated by using White's specification to adjust for cross‐section heteroskedasticity.

During the period under study, the empirical findings indicate that scale inefficiency outweighs pure technical inefficiency in determining the Thailand banking sector's technical efficiency. The results from the multivariate regression analysis suggest that banks with higher loans intensity and better capitalized tend to exhibit higher efficiency levels. On the other hand, credit risk is negatively related to bank efficiency. The empirical findings suggest that the recent global financial crisis exerts negative impact on the efficiency of Thailand banks. The results indicate that the domestic banks have exhibited higher TE compared to their foreign bank counterparts.

Owing to its limitations, the paper could be extended in a variety of ways. First, the scope of this study could be further extended to investigate changes in cost, allocative, and technical efficiencies over time. Second, future research into the efficiency of the Thailand banking sector efficiency could also consider the production function along with the intermediation function. Finally, investigation of changes in productivity over time as a result of technical change or technological progress or regress by employing the Malmquist total factor productivity index could yet be another extension to the paper.

Although the literature examining the efficiency of financial institutions with parametric and/or non‐parametric frontier techniques has expanded rapidly in recent times, these studies have been confined to the US banking sector or the banking sectors in the Western and developed countries. However, empirical evidences on the developing countries banking sectors in general and of the ASEAN countries in particular are relatively sparse. The present paper attempted to fill a demanding gap in that case by providing new empirical evidence on the sources and determinants of the Thailand banking sector's efficiency.