Search results

This paper aims to investigate the role of corporate governance on the bank profitability of Indian banks vis-à-vis South Asian Association for Regional Cooperation (SAARC) nations.

For the Corporate Governance Index, the authors examined board accountability, transparency and disclosure and audit committee, while Tobin’s Q, return on equity and return on assets are used to measure the bank’s profitability. The study used a two-stage analysis based on balanced panel data for robust findings. Sample of this study consists of 60 commercial banks from India and 60 banks from SAARC nations for the period of 2009–2021. This study used panel regression and a generalized method of moment approach using the CAMELS framework on banking industry-specific variables to determine their respective impacts.

The findings of this study suggest that board accountability is positive and significantly affects the profitability of banks as indicated by return on assets, return on equity and Tobin’s Q. In contrast, the audit committee has a positive and insignificant impact on return on assets, return on equity and Tobin’s Q, while transparency and disclosure have a negative and significant impact on these metrics. Furthermore, the country dummy result shows a significant positive impact on all the bank performance parameters, implying that Indian banks have the highest degree of convergence with corporate governance as compared to other SAARC nations.

This study provides insight to the regulators, policymakers and financial institutions to evaluate the role of corporate governance in emerging economies. However, the findings of the study should be interpreted with caution, as the results are sensitive to the disparity between India and other SAARC nations' government policies, climatic circumstances and cultural or religious traditions.

To the best of the authors’ knowledge, this is the first attempt to gauge the performance of Indian banks vis-à-vis SAARC nations using the CAMELS framework approach. Further, findings of this study suggest some novel evidence tying corporate governance quality with the profitability of banks among SAARC nations.

This paper aims to unravel the impact of post-pandemic COVID-19 on foreign direct investment (FDI) and its determinants in the South Asian Association for Regional Cooperation (SAARC) Countries.

The study utilized four macroeconomic variables includes growth domestic product growth rate (GDPG), inflation rate (IR), exchange rate (ER), and unemployment rate (UR) to assess their impact on post-pandemic FDI, along with two variables control of corruption (CC) and political stability (PS) to measure the influence of good governance. Random effects, fixed effects, cluster random effects, cluster fixed effects and generalized method of moments (GMM) models were applied to a balanced panel dataset comprising eight SAARC countries over the period 2010–2021. To identify the random trend component in each variable, three renowned unit root tests (Levin, Lin and Chu LLC, Im-Pesaran-Shin IPS and Augmented Dickey-Fuller ADF) were used, and co-integration associations between variables were verified through the Pedroni and Kao approaches. Data analysis was performed using STATA 17 software.

The major findings revealed that the variables have an order of integration at the first difference I (1). Nonetheless, this situation suggests the possibility of a long-term link between the series. And the main results of the findings show that the coefficients of GDPG, CC and PS are positive and significant in the long run, showing that these variables boosted FDI inflows in the SAARC region as they are significantly positively linked to FDI inflows. Similarly, the coefficients of UR, IR, ER and COVID-19 are negative and significant.

By identifying the specific impacts of the post-pandemic FDI and its determinants, governments and policymakers can formulate targeted policies and measures to mitigate the adverse effects and enhance investment attractiveness. Additionally, investors can gain a deeper understanding of the risk factors and adapt their strategies accordingly, ensuring resilience and sustainable growth. Finally, this paper adds value to the literature on the post-pandemic impact on FDI inflows in the SAARC region.

This paper is the first attempt to trace the impact of COVID-19 on Foreign Direct Investment and its determinants in the SAARC Countries. Most of the previous studies were analytical in nature and, if empirical, excluded some countries due to the unviability of the data set. This study includes all the SAARC member countries, and all variables' data are completely available. There is still a lack of empirical studies related to the SAARC region; this study attempts to fill the gap.

This paper makes a novel attempt to estimate the potential impact of credit risk on foreign direct investment (FDI hereafter), thereby focusing on a completely unexplored area in the existing empirical literature.

To provide a comprehensive understanding of the relationship between credit risk and FDI inflows, the study incorporates all the eight-member economies of the South Asian Association of Regional Cooperation (SAARC hereafter) and analyzes a panel data set, over the period 2011 to 2019, extracted from the World Development Indicators, using the suitable econometric techniques for the efficient estimations of the specified models.

The results indicate a negative and statistically significant relationship between the credit risk of the banking sectors and FDI inflows. Similarly, market size and inflation rate appear to be the two other main factors behind the increasing FDI inflows in the SAARC member economies. Interestingly, the size of the market became irrelevant in attracting FDI inflows when the Indian economy is excluded from the sample due to its higher economic weight. On the other hand, FDI inflows are not dependent on the level of trade openness, with most of the specifications showing either an insignificant or negative coefficient of the variable.

The obtained results are unique and robust to alternative methodologies, and hence, the SAARC economies could consider them as the critical inputs in formulating the appropriate policies on FDI inflows.

The findings are unique and original. The authors have established a relationship between credit risk and FDI for the first time in the SAARC context.

The present study aims to examine the moderating impact of governance quality on the tourism poverty nexus using a panel of six South Asian Association for Regional Cooperation (SAARC) countries during the period 2002 to 2019.

For the soundness of the results, fully modified ordinary least square (FMOLS) and dynamic ordinary least square (DOLS) econometric models were applied to determine the long-run relationship.

The findings confirmed the positive and significant impact of tourism development (international tourism arrival) and governance quality (effectiveness of governmental services) on poverty (per capita household consumption) reduction. Interestingly results confirm that governance quality and tourism development have complementary impacts on poverty reduction.

The present study has twofold contributions; First, despite the high potential of SAARC tourism, research remains limited in studies examining the role of tourism and governance quality on poverty reduction within the SAARC region. As a result, the present paper presents critical insights into the impact of tourism inflow and governance quality on poverty reduction in South Asian countries. Second, to the best of the author's knowledge, this is the first attempt to conduct an econometric analysis to examine the role of governance quality on the relationship between tourism inflow and poverty reduction in SAARC countries.

This study aims to explore the determinants of public debt in selected South Asian Association for Regional Cooperation (SAARC) countries for 19 years, from 2001 to 2019.

Using ordinary fixed and random effect models, the authors examine the role of internal and external factors in determining the composition of public debt. Furthermore, for robustness, they compare the results with two-stage least square (2SLS) regression estimates after considering the problem of endogeneity, overidentification, under-identification and weak instruments.

The findings show that among the selected macroeconomic variables, inflation, exchange rate and broad money have significant negative effects on the debt-GDP ratio. In contrast, military spending, corruption and interest rates appear to positively influence the same as per 2SLS results. From the policymaking perspective, SAARC countries should focus more on reducing military spending and make a concerted effort to augment investments in productive projects. Further, with strong fiscal consolidation and institutional quality, it is important to mitigate the frequent occurrence of corruption conundrums in emerging economies for the development of a transparent economic system.

The study is distinct from previous studies in two ways. First, to the best of the authors’ knowledge, there are no studies focusing on SAARC countries in the context of public debt. Second, the study expands the existing literature on public debt by taking into account both external and internal debts to decipher the within-country and cross-country determinants of debt accumulation. More specifically, this model considers accountability and transparency in the public sector, cross-border security challenges and benefits of globalization by including explanatory variables such as corruption, military expenditure spending and capital inflows.

This study aims to examine the effect of economic growth and the moderating impact of inflation on financial development (FD) for six South Asian Association of Regional Countries (SAARC)es during the period of 1990–2020. Besides, the inflation threshold level and FD index are also estimated.

This study uses several cross-sectional dependency tests, pooled mean group and panel fully modified least squares method. This study also makes use of principle component analysis in index construction.

The results indicate that economic growth positively impacts regions’ FD. The mediating term has a negative impact on FD when the inflation rate rises. The finding indicates after the 3.5% threshold limit, inflation changes its positive effect on FD. The constructed index is a superior measurement of FD because it controls measurement sensitivity and offers significant results.

To the best of the authors’ knowledge, this is the first empirical study in the context of SAARC to analyse the interaction effect of inflation on the growth–finance relationship. This study’s novelty is further ensured by estimating the threshold level of inflation and construction index.

The main purpose of this research is to examine the influence of macroeconomic stability on economic growth of SAARC (South Asian Association for Regional Cooperation) countries.

Using panel data of 1991–2020, fixed effect regression analysis, pooled ordinary least squares and generalized method of moments techniques have been conducted to demonstrate whether macroeconomic stability contributes to economic growth. Moreover, cross-sectional dependency test, unit root test, correlation analysis and granger causality tests have been run.

Robust findings indicate that inflation has negative impacts on economic growth which indicates that lower level of macroeconomic instability promotes countries’ economic growth. This study also observed that foreign direct investment, domestic credit delivered to private sector, currency exchange and institutional difference across countries are affirmatively connected while labor force is negatively associated with economic growth.

Empirical findings of this study signify that macroeconomic stability have significant effects on economic growth. Findings of this study have superior contributions for the policy makers to achieve sustainable economic growth.

The scope of this work is to explore whether Regional Comprehensive Economic Partnership (RCEP) would be beneficial to Bangladesh, given Bangladesh's strong ties with India and the west.

Using extended gravity equation and data from Head and Mayer (2021) and the Direction of Trade Statistic (IMF, 2021) for Bangladesh with its applicable partner countries from 1972 till 2019, the authors attempted to examine the potential impact of joining RCEP while keeping its relationship with South Asian Association for Regional Cooperation (SAARC), and other existing economic integration schemes intact.

Using traditional pooled ordinary least squares, two-stage least square and generalized method of moment techniques, it has been revealed that conventional partners in the South led by India are still beneficial to Bangladeshs trading line. Joining RCEP provides ample avenues for trade expansion without replacing the positive effects of SAARC.

Traditional partners from European, American and South Asian trading opportunities are still paying enough dividends to Bangladesh. RCEP is providing a trade-enhancing chance for Bangladesh in the eastern direction. This paper provides a policy suggestion to look east policy of government. A total overhaul of her tax structure through minimizing excessive reliance on import tariff revenue is desired to facilitate her to join RCEP in the future because most of its prospective RCEP partners are import partners.

This is the first and the only study which explores the feasibility of Bangladesh to join the RCEP by using the most recently updated gravity data in a panel framework.

1. Since its inception on November 15, 2020, Regional Comprehensive Economic Partnership (RCEP) has emerged as one of the largest economic integration areas in the world.

2. As a borderline country between South Asia and RCEP, Bangladesh is in a fix to take a decision either to join or not to join RCEP if they are invited.

3. This paper used the gravity equation in an extended form by taking Bangladesh with its 197 trading partners’ trade data for 1972–2019.

4. The findings postulate that the existing relationship with SAARC countries is still beneficial to its welfare, and RCEP is also economically helpful in enhancing its trade.

Since its inception on November 15, 2020, Regional Comprehensive Economic Partnership (RCEP) has emerged as one of the largest economic integration areas in the world.

As a borderline country between South Asia and RCEP, Bangladesh is in a fix to take a decision either to join or not to join RCEP if they are invited.

This paper used the gravity equation in an extended form by taking Bangladesh with its 197 trading partners’ trade data for 1972–2019.

The findings postulate that the existing relationship with SAARC countries is still beneficial to its welfare, and RCEP is also economically helpful in enhancing its trade.

The purpose of this study is to investigate the association between three corporate governance (CG) idiosyncrasies, namely audit committee characteristics, external audit quality (AQ), board diversity and firm performance (FP) in the South Asian Association for Regional Cooperation (SAARC) nations.

The study used a sample of 200 listed nonfinancial firms in the SAARC nations from 2012 to 2021. The System Generalized Method of Moment model was applied to the data consisting of 2000 firm-year observations. The Generalized Estimating Equation population-averaged model was also employed for added robustness. The study employed Tobin's Q as the measure of FP.

The findings revealed that amongst the CG variables tested, external AQ exhibited a significantly positive relationship with Tobin's Q. Significant negative influences on FP have been demonstrated by the variables of audit committee meeting and board's independence. Furthermore, gender diversity, CEO duality, audit committee strength and independence failed to record any significant association.

This study is one of the first to investigate the association between CG idiosyncrasies and FP in the SAARC nations. The study findings have important implications for policymakers and regulators in the region.

The study investigates the impact of competition and concentration on bank risk-taking behavior and stability in the South Asian Association for Regional Cooperation (SAARC) region.

Data from 100 banks from 2013 to 2021 was analyzed using dynamic and static measures by using dynamic system GMM.

Results showed that higher competition reduces stability, while concentration in the banking sector produces stability and reduces risk-taking behavior. The findings suggest that regulatory agencies should take different actions based on the degree of banking market concentration to enhance banking sector stability in the SAARC area.

The research helps regulators and decision-makers establish capital requirements at levels that would prevent banks from increasing their risk-taking in order to boost profits and, therefore, reduces hazardous practices that might increase the risk.

The research helps establish capital requirements to prevent banks from increasing risk-taking to boost profits and avoid hazardous practices that could increase nonperforming loans and bank failure risks.