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Article
Publication date: 26 October 2021

Tu D.Q. Le and Dat T. Nguyen

The study aims to investigate the relationship between a shift in lending activities toward households, credit information sharing and bank stability.

Abstract

Purpose

The study aims to investigate the relationship between a shift in lending activities toward households, credit information sharing and bank stability.

Design/methodology/approach

A system generalized method of moments (GMMs) as proposed by Arellano and Bover (1995) is employed to examine the relationship using a sample of 80 countries from 2005 to 2014.

Findings

The findings demonstrate that, in general, a shift in lending strategy toward the household sector may increase bank instability while credit information sharing has a positive impact on bank stability. When credit information sharing is promoted widely, this shift may become beneficial for the banking system. The results are robust when using different measures of credit information sharing, including the depth of index and the coverage of credit information sharing mechanisms.

Practical implications

The results demonstrate that a shift in lending activities toward households should be considered a key variable in conducting macro-prudential policies. When a shift toward household credit relative to firm credit is evolved, the findings suggest that the authorities around the world should enact laws that magnify the scope and coverage of credit information shared and thus promoting the effectiveness of information sharing.

Originality/value

The current study is the first attempt that examines the impacts of a shift in lending activities toward households and credit information sharing on bank stability.

Details

International Journal of Managerial Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 12 October 2021

Rexford Abaidoo, Elvis Kwame Agyapong and Kwame Fosu Boateng

This paper aims to examine the effect of volatility in prices of internationally traded commodities (the backbone of most economies) on the stability of the banking…

Abstract

Purpose

This paper aims to examine the effect of volatility in prices of internationally traded commodities (the backbone of most economies) on the stability of the banking industry from three main perspectives; bank liquidity reserves, overall bank risk and bank capital adequacy.

Design/methodology/approach

Data were compiled from various sources for 30 emerging economies from 2002 to 2018 and were analyzed using the two-step system generalized method of moments estimation technique.

Findings

The study finds that all things being equal, the magnitude and direction of impact of commodity price volatility on bank stability among economies in Sub-Saharan African (SSA) depend on the type and nature of the commodity in question; and the bank stability proxy used. For instance, an increase in crude oil prices is found to foster stability in the banking industry (proxied by bank liquid reserves) but insignificant when stability in the banking industry is proxied using other banking sector parameters. Additionally, government effectiveness and corruption control have varying moderating influences on how volatility associated with prices of internationally traded commodities influence various proxies for banking industry stability.

Originality/value

This study highlights the effect of fluctuations in prices of key internationally traded commodities (adjusted for foreign exchange impact) that are important sources of revenue among economies in SSA on banking sector stability from liquidity, overall risk and capital adequacy perspectives. The influential role of governance in the relationship between volatility in the price of commodities and bank stability is also revealed by the study.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 5 August 2021

Zhonglu Liu, Haibo Sun and Songlin Tang

Climate change not only causes serious economic losses but also influences financial stability. The related research is still at the initial stage. This paper aims to…

Abstract

Purpose

Climate change not only causes serious economic losses but also influences financial stability. The related research is still at the initial stage. This paper aims to examine and explore the impact of climate change on financial stability in China.

Design/methodology/approach

This paper first uses vector autoregression model to study the impact of climate change to financial stability and applies NARDL model to assess the nonlinear asymmetric effect of climate change on China’s financial stability using monthly data from 2002 to 2018.

Findings

The results show that both positive and negative climate shocks do harm to financial stability. In the short term, the effect of positive climate shocks on financial stability is greater than the negative climate shocks in the current period, but less in the lag period. In the long term, negative climate shocks bring larger adjustments to financial stability relative to positive climate shocks. Moreover, compared with the short-term effect, climate change is more destructive to financial stability in the long run.

Originality/value

The paper provides a quantitative reference for assessing the nexus between climate change and financial stability from a nonlinear and asymmetric perspective, which is beneficial for understanding climate-related financial risks.

Details

International Journal of Climate Change Strategies and Management, vol. 13 no. 3
Type: Research Article
ISSN: 1756-8692

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Article
Publication date: 18 August 2021

Hasanul Banna, M. Kabir Hassan, Rubi Ahmad and Md Rabiul Alam

This paper aims to explore the role of digital financial inclusion (DFI) in stabilizing the Islamic banking sector amidst the current COVID-19 pandemic.

Abstract

Purpose

This paper aims to explore the role of digital financial inclusion (DFI) in stabilizing the Islamic banking sector amidst the current COVID-19 pandemic.

Design/methodology/approach

This study has used the Panel-Corrected Standard Errors (PCSE), Two-Stage Panel Least Squares-Instrumental Variables (2SLS-IV) and Two-Step System Generalized Method of Moments (2SGMM) dynamic panel estimation method to investigate the DFI-Islamic banking stability nexus using an unbalanced panel data of 65 Islamic banks from six countries over the period 2011–2020.

Findings

The result suggests that greater implementation of DFI promotes Islamic banking stability, which reduces the default risk of the banks in the studied region. Consequently, incorporating DFI into the Islamic banking sector encourages inclusive economic growth that can keep the financial sector sustainable even in a crisis period like the current COVID-19 pandemic.

Originality/value

Unlike previous studies, the authors have focused mainly on DFI and the Islamic banking sector. This is one of the first to explore how DFI contribute to the stability and productivity of the Islamic banking sector during the pandemic. Also, this study provides fresh evidence on how the supply and demand side of DFI impact Islamic banking stability.

Details

International Journal of Islamic and Middle Eastern Finance and Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-8394

Keywords

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Article
Publication date: 24 August 2021

Richard Boachie, Godfred Aawaar and Daniel Domeher

The purpose of this paper is to analyse the relationship between financial inclusion, banking stability and economic growth in sub-Saharan African countries given the…

Abstract

Purpose

The purpose of this paper is to analyse the relationship between financial inclusion, banking stability and economic growth in sub-Saharan African countries given the interconnectedness between them. Globally, financial inclusion has gained recognition as a critical channel for promoting economic growth by bringing a large proportion of the unbanked population into the formal financial system. This cannot be achieved exclusive of the banking sector.

Design/methodology/approach

This paper focussed on 18 countries in sub-Saharan Africa. Data on financial inclusion and the economy were obtained from the World Bank, and bank soundness indicators data were also obtained from International Monetary Fund covering the 11-year period from 2008 through 2018. Panel system generalised method of moments is employed for the regression analysis because it has the capability to produce unbiased and consistent results even if there is endogeneity in the model.

Findings

The results show that economic growth drives banking stability and not vice versa; confirming a unidirectional causality from gross domestic product to banking stability. So, this study finds support for the demand-following hypothesis. The paper further observed that financial inclusion positively and significantly influences the stability of banks and economic growth. The study established that bank capital regulation negatively influences banking stability in sub-Saharan African countries.

Research limitations/implications

This study does not capture the unique country-specific relationship.

Practical implications

The policy implication is that policymakers in sub-Saharan African countries should focus on growth-enhancing policies that improve the level of financial inclusion. The central banks in sub-Saharan African countries should take advantage of the positive effect of financial inclusion to develop regulatory frameworks and policies that make it attractive for banks to continue to expand their operations to the unbanked.

Originality/value

This is, as far as the authors know, the explanation of the interconnection of financial inclusion, banking stability and economic growth in sub-Saharan Africa.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 24 August 2021

Nathália Amarante Pufal and Paulo Antônio Zawislak

The purpose of this paper is to examine different types of organization of the firm considering the innovation capabilities of manufacturing firms.

Abstract

Purpose

The purpose of this paper is to examine different types of organization of the firm considering the innovation capabilities of manufacturing firms.

Design/methodology/approach

The authors carried out an innovation survey with Brazilian manufacturing firms. A sample of 1,156 firms was analyzed in this paper. Collected data were analyzed using multivariate data analysis techniques. From an innovation capabilities approach, it was possible to identify different types of organization of the firm.

Findings

Results show four different types of organization of the firm: advanced, intermediate and basic stability-oriented and change-oriented. Each type presents a different innovation capabilities arrangement. The successful strategies toward innovation are related to change-oriented organization of the firm and advanced stability-oriented organization of the firm.

Research limitations/implications

This study contributes to the literature by presenting a different view on the organization of the firm, encompassing the capabilities approach and thus a higher level on the perception of firms' heterogeneity. This study contributes to narrow the literature gap on how firms internally coordinate its different capabilities into a coherent organization to sustain an innovative behavior.

Practical implications

These straightforward findings can serve as a guideline so that managers can conduct changes within their companies toward more innovation. Managers can reconsider its organization as a way to foment innovation, once it is identified as a key strategy for competitiveness.

Social implications

This study may help managers understand that focusing on stability-driven capabilities is riskier if change-driven capabilities are not present in an adequate and aligned level of development. The outcome may be the growth of the cost structure greater than the potential return. Conversely, managers should also understand that once change-driven capabilities are in a glance, they need do follow up with stability-driven capabilities. Here, the risk is not having an adequate structure to sustain the upcoming growth, arising from innovation. In short, not only “cost and value” should be taken together, but they must be arranged following the specific situation of the company. Every company should manage costs either to sustain new added value or to allow the addition of new value.

Originality/value

The study is based on a unique dataset that traces a large set of companies, being able to check different types of firm organization and associate it with innovation capabilities. The study relates to an emerging economy, which has not received adequate attention until now, largely because of the lack of micro-level data. The study is based on a robust theoretical model of innovation capabilities, which is being tested through such data. Finally, results elucidate ways to improve innovation performance of firms.

Details

Journal of Manufacturing Technology Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1741-038X

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Article
Publication date: 3 August 2021

Antony Rahim Atellu, Peter Muriu and Odhiambo Sule

This paper aims to establish the effect of bank regulations on financial stability in Kenya. Specifically, the study seeks to uncover the effect of micro and macro…

Abstract

Purpose

This paper aims to establish the effect of bank regulations on financial stability in Kenya. Specifically, the study seeks to uncover the effect of micro and macro prudential regulations on financial stability and their trade-offs or complementarities.

Design/methodology/approach

Using annual time series data over the period 1990–2017, the study uses structural equation model (SEM) estimation technique. This solves the problem of approximating measurement errors, using both latent constructs and indicator constructs.

Findings

Study findings reveal that macro and micro prudential regulations are significant drivers of financial stability. Further, prudential regulations are more effective when they complement each other.

Research limitations/implications

This study centers on how bank regulations affect financial stability. Future research could be carried out on the effect of Non-Bank Financial Institutions regulations on financial system stability.

Practical implications

Complementing macro and micro prudential regulation is more effective and efficient in ensuring stability of the financial system other than letting the two policy objectives operate independently.

Social implications

Regulatory authorities should introduce prudential regulations that would encourage innovations in the banking sector. This ensures easy deposit mobilization that enhances financial inclusion. Prudential regulations that ensure financial stability will be effective when low income earners are included in the financial system.

Originality/value

To the best of the authors’ knowledge, this study is the first to investigate the role of banking regulations on financial stability. This study is also pioneering in the use of SEM estimation technique, in examining how prudential regulations affect financial stability. Previous cross-country studies have focused on macro prudential regulations ignoring the importance of micro prudential regulations.

Details

Journal of Financial Regulation and Compliance, vol. 29 no. 5
Type: Research Article
ISSN: 1358-1988

Keywords

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Article
Publication date: 3 August 2021

Kolawole Ebire, Saif Ullah, Bosede Ngozi Adeleye and Muhammad Ibrahim Shah

This study aims to examine the effect of various forms of capital flows on financial stability in middle-income countries from 2010 to 2017 using the World Bank economy…

Abstract

Purpose

This study aims to examine the effect of various forms of capital flows on financial stability in middle-income countries from 2010 to 2017 using the World Bank economy classifications of 121 economies.

Design/methodology/approach

Panel spatial correlation consistent approach was used in this study.

Findings

The findings provide convincing evidence that in middle-income countries, capital flows are positive and significant predictors of financial stability and that financial systems in advanced economies are more stable than those of emerging and developing countries. However, outward foreign direct investments are shown to have the largest potential for ensuring financial stability.

Originality/value

Globalization has fostered financial integration of nations, which is manifested in capital flows from lower-income countries to middle-income and upper-income countries and vice versa. These flows can lead to financial instability if not properly controlled. The authors show how the various forms of capital flows affect the financial stability in middle-income countries.

Details

Journal of Financial Regulation and Compliance, vol. 29 no. 5
Type: Research Article
ISSN: 1358-1988

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Article
Publication date: 4 September 2017

Marcin Figat

This paper aims to present the results of aerodynamic calculation of impact the main rotor on the fuselage and the tail of a light gyroplane. This kind of vehicle is a…

Abstract

Purpose

This paper aims to present the results of aerodynamic calculation of impact the main rotor on the fuselage and the tail of a light gyroplane. This kind of vehicle is a type of rotorcraft which uses a non-powered rotor in autorotation to develop lift and engine-powered propeller to provide the thrust. Both of them disturb the flow around the gyroplane body (gyroplane fuselage and tail) and influence on its static stability. The main goal of the presented research was to find the magnitude of this influence. To measure this effect, the main stability derivatives changes of gyroplane body were investigated.

Design/methodology/approach

The CFD analysis of the complete gyroplane was made. Computation was performed for the model of gyroplane which was equipped with the two sub-models of the main rotor and the engine-powered propeller. Both of them were modelled as the actuator discs. This method allows to compute the aerodynamic impact of rotating components on the gyroplane body. All aerodynamic analysis was made by the MGAERO software. The numerical code of the software bases on the Euler flow model. Next, the resulting aerodynamic coefficients were used to calculate the most important stability derivatives of the gyroplane body.

Findings

The result obtained by computation presents the change in the most important aerodynamic coefficients and stability derivatives of the gyroplane body caused by the impact of its main rotor. Moreover, the result includes the change of the aerodynamic coefficients and stability derivatives caused by change of the main rotor configuration (change of rotation rate and angle of incidence) and change of the flight condition (gyroplane angle of attack sideslip angle and flight speed).

Practical implications

Analysis of the main rotor impact will be very useful for evaluation of dynamic stability of the light gyroplane. Moreover, the results will be helpful to design the horizontal and vertical tail for the light gyroplane.

Originality/value

This paper presents the method of the numerical analysis of the static stability of the light gyroplane’s body. The results of analysis present the impact of disturbance generated by the rotating main rotor on the static stability of the gyroplane body. Moreover, the impact of the main rotor configuration change and the flight condition change on the static stability were investigated too. The evaluation of the gyroplane’s body static stability was made by the stability derivatives. The methodology and obtained result will be very useful for analysis of the dynamic stability of the light gyroplanes. Moreover, the results will be helpful during design the main components of the gyroplane like vertical and horizontal tail.

Details

Aircraft Engineering and Aerospace Technology, vol. 89 no. 5
Type: Research Article
ISSN: 1748-8842

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Article
Publication date: 14 June 2011

Huaishu Li, Yanhui Lai, Wu Qiang and Xiang Dong

In order to research the law of the low‐frequency power oscillation which often exists in the synchronous generator rectification system, the purpose of this paper is to…

Abstract

Purpose

In order to research the law of the low‐frequency power oscillation which often exists in the synchronous generator rectification system, the purpose of this paper is to study theoretical analysis and numerical calculation on the static stability of the system.

Design/methodology/approach

Different from the common three‐phase synchronous generator operating in large power networks, the stability of synchronous generator rectification systems is much more difficult to analyze because of its nonlinear loads. Some papers have analyzed the stability of the synchronous generator rectification system and presented different parameter conditions of system stability, but since factors that influence the system stability are complex, the essence of this kind of oscillation is not completely known yet. By considering rectification systems as an equivalent to DC circuits, the correct circuit model which is necessary to analyze the rectification systemic stability is set up, the changing law and relationship of various parameters under mini‐disturbances is analyzed, a linear differential equation about the DC‐side average current is derived, the stability of the synchronous generator rectification system is analyzed and deduced by using Hull criterion, all parameters influencing system stability are calculated and analyzed, and their ranges for a stable rectification system are given. Also, the reason why and how the parameters affect system stability is explained.

Findings

The operational stability of synchronous generator rectification systems is completely and correctly recognized.

Practical implications

The paper has a reference value for the design and safe operation of synchronous generator rectification systems.

Originality/value

The paper puts forward system stability criterion and gives a rational physical explanation about system stability.

Details

Kybernetes, vol. 40 no. 5/6
Type: Research Article
ISSN: 0368-492X

Keywords

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