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1 – 10 of over 2000Fernanda Cigainski Lisbinski and Heloisa Lee Burnquist
This article aims to investigate how institutional characteristics affect the level of financial development of economies collectively and compare between developed and…
Abstract
Purpose
This article aims to investigate how institutional characteristics affect the level of financial development of economies collectively and compare between developed and undeveloped economies.
Design/methodology/approach
A dynamic panel with 131 countries, including developed and developing ones, was utilized; the estimators of the generalized method of moments system (GMM system) model were selected because they have econometric characteristics more suitable for analysis, providing superior statistical precision compared to traditional linear estimation methods.
Findings
The results from the full panel suggest that concrete and well-defined institutions are important for financial development, confirming previous research, with a more limited scope than the present work.
Research limitations/implications
Limitations of this research include the availability of data for all countries worldwide, which would make the research broader and more complete.
Originality/value
A panel of countries was used, divided into developed and developing countries, to analyze the impact of institutional variables on the financial development of these countries, which is one of the differentiators of this work. Another differentiator of this research is the presentation of estimates in six different configurations, with emphasis on the GMM system model in one and two steps, allowing for comparison between results.
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This paper aims to examine the effectiveness of monetary policy on bank loans in Egypt using generalized method of moments (GMM) model. Also, it investigates the impact of bank…
Abstract
Purpose
This paper aims to examine the effectiveness of monetary policy on bank loans in Egypt using generalized method of moments (GMM) model. Also, it investigates the impact of bank level variables, namely, total assets, liquidity, capital and income on bank loans. It develops the equation of loans, which is introduced by Ehrmann et al. (2002) using bank level variables such as income and the interaction between income and interest rate.
Design/methodology/approach
This paper examines the impact of monetary policy shocks on bank loans in Egypt by applying the GMM technique and panel data from 1996 to 2014.
Findings
The results reveal that real interest rate has a significant impact on bank loans, which indicates that the bank lending channel is effective in Egypt. Furthermore, the bank level variables, namely, banks’ size, liquidity and income have significant effects on bank loans in Egypt, which sustains the heterogeneous effect of monetary policy on bank loans. Therefore, the Central Bank of Egypt (CBE) can adjust interest rate to influence the bank loans and total demand.
Research limitations/implications
It does not examine the effect of monetary policy on small and large banks in Egypt.
Practical implications
The policy implications from this paper indicate that the monetary authority in Egypt should adjust interest rate to stabilize the bank loan supply. By stabilizing the bank loans, the monetary authority is able to stabilize investment, consumption and total demand.
Social implications
The relevance of bank lending channel indicates that the role of commercial banks is very important in transmitting monetary policy shocks to the real sector.
Originality/value
It is important for the CBE, banks and people because it shows the effectiveness of bank lending channel and the effect of global financial crisis on the Egyptian economy.
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The purpose of this paper is to examine the impact of the Yemen War on banking services (deposits and loans) at the aggregate and at the level of conventional and Islamic banks in…
Abstract
Purpose
The purpose of this paper is to examine the impact of the Yemen War on banking services (deposits and loans) at the aggregate and at the level of conventional and Islamic banks in GCC countries. The author also tests hypotheses of direct and indirect impacts of the Yemen War on bank services.
Design/methodology/approach
The sample comprises a total of 70 banks (45 conventional and 25 Islamic banks) over the period 2000–2018. The static and dynamic panel generalized methods of moments (GMM) estimation techniques are applied.
Findings
Empirical results indicate that the Yemen War has a significant negative direct impact on deposits and loans of GCC banks. The results lend support for the direct channel hypothesis, but not for the indirect channel hypothesis. The negative direct impact is most prominent on banks in GCC countries that are directly involved in the Yemen War, although the war has an asymmetric effect on conventional and Islamic banks, the former being more vulnerable. The overall conclusion is that the Yemen War exerts an asymmetric impact on the GCC region, across both banks and countries.
Practical implications
These results are a warning to policymakers to be cautious when formulating a strategy for macroeconomic stability.
Originality/value
It is widely recognized that the Yemen War has a significant impact on the economies of the GCC countries. However, the possible impact of the war on GCC bank services has not so far been subjected to robust empirical analysis. This paper therefore seeks to fill this gap by providing an in-depth quantitative analysis of this impact. It distinguishes between direct and indirect channels through which the Yemen War may affect bank services. It is also the first to examine the asymmetric impact of the Yemen War on the GCC region, across both banks (Islamic and conventional banks) and countries (whether or not involved in the war). The study uses both static panel and dynamic panel GMM estimation techniques to analyze the data.
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Mohamed Aseel Shokr and Anwar Al-Gasaymeh
The purpose of this paper is to examine the relevance of the bank lending channel (BLC) of monetary policy and the bank efficiency in Egypt.
Abstract
Purpose
The purpose of this paper is to examine the relevance of the bank lending channel (BLC) of monetary policy and the bank efficiency in Egypt.
Design/methodology/approach
This paper examines the effectiveness of bank lending channel using generalized method of moments GMM model during the period from 1996 to 2014. Also, it uses stochastic frontier approach (SFA) to examine the bank efficiency in Egypt.
Findings
This study supports the relevance of the BLC using panel data. Moreover, applying SFA, this paper computes cost efficiency taking account of both time and country effects directly. The finding suggests that banks with low inflation and high GDP tend to perform more efficiently.
Research limitations/implications
The limitation of the study is examining one country only.
Practical implications
The finding signals that the Central Bank of Egypt (CBE) should adjust interest rate in order to stabilize the bank loan supply.
Social implications
It is important for the CBE and Egyptian banks because it highlights the importance of BLC.
Originality/value
It examines one channel of monetary policy and bank efficiency in Egypt.
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This paper investigates and compares the impact of foreign direct investment (FDI) inflows (flow and stock) on bank off-balance sheet (OBS) activities in aggregate as well as at…
Abstract
Purpose
This paper investigates and compares the impact of foreign direct investment (FDI) inflows (flow and stock) on bank off-balance sheet (OBS) activities in aggregate as well as at the level of conventional and Islamic banks in GCC countries. It also tests hypotheses of direct and indirect impacts of FDI flow and FDI stock on OBS activities.
Design/methodology/approach
This paper uses both static and dynamic panel generalized methods of moments (GMM) estimation techniques to analyze the data of 70 GCC banks (45 conventional and 25 Islamic banks) over the period 1995–2017.
Findings
Empirical results indicate that FDI flow and FDI stock have a significant negative direct impact on OBS activities of GCC banks. The results lend support for the direct channel hypothesis for the effect of FDI on OBS activities and find no evidence in support of the indirect channel hypothesis. OBS activities from conventional banks appear to be more affected than those from Islamic banks.
Practical implications
The results of this study are expected to trigger appropriate policy response from the central banks of the respective GCC countries as well as their governments.
Originality/value
It is widely recognized that FDI inflows are of great importance to the economic development of emerging and developing countries. However, their impact on bank OBS activities has so far not been subject to accurate empirical assessment. This paper aims to fill this gap by providing an in-depth quantitative analysis of the impact of FDI flow and FDI stock separately, on bank OBS activities for both conventional and Islamic banks in GCC countries. It distinguishes between direct and indirect channels through which FDI flow and FDI stock may affect OBS activities for banks as a whole and both conventional and Islamic banks separately. It also uses both static and dynamic panel GMM estimation techniques to analyze the data.
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Abdulazeez Y.H. Saif-Alyousfi, Rohani Md-Rus, Kamarun Nisham Taufil-Mohd, Hasniza Mohd Taib and Hanita Kadir Shahar
The purpose of this paper is to examine the determinants of capital structure using a dataset of firms in Malaysia.
Abstract
Purpose
The purpose of this paper is to examine the determinants of capital structure using a dataset of firms in Malaysia.
Design/methodology/approach
This paper carries out a panel data analysis of 8,270 observations from 827 listed non-financial firms on the Malaysia stock market over the period 2008–2017. To estimate the model and analyse the data collected from the DataStream and World Bank databases, the authors use static panel estimation techniques as well as two-step difference and system dynamic GMM estimator.
Findings
The results show that profitability, growth opportunity, tax-shield, liquidity and cash flow volatility have a negative and significant impact on debt measures. However, the effects of collateral, non-debt tax and earnings volatility on measures of debt are positive and significant. In addition, firm size, firm age, inflation rate and interest rate are important determinants of the present value of debt. The results also show a significant inverse U-shaped relationship between the firm's age and its capital structure. In general, the results support the proposition advocated by the pecking order and trade-off theories.
Practical implications
The results of this study necessitate formulation of various policy measures that can counter the effects of debt on firms.
Originality/value
The present study is among the earliest to use both the book and market value measures of capital structure. It also uses three proxies for each: total debt, long-term debt and short-term debt. It incorporates earning volatility and cash flow volatility as new independent variables in the model. These variables have not previously been used together with both book and market value measures of capital structure. The study also examines the non-monotonic relationship between firm's age and capital structure using a quadratic regression method. It applies both static panel techniques and dynamic GMM estimation techniques to analyse the data.
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Müzeyyen Merve Şeri̇foğlu and Pelin Öge Güney
This paper investigates the two-way relationship between foreign direct investment (FDI) inflows and higher education across 36 Organisation for Economic Co-operation and…
Abstract
Purpose
This paper investigates the two-way relationship between foreign direct investment (FDI) inflows and higher education across 36 Organisation for Economic Co-operation and Development (OECD) countries for 1998–2019 periods. To demonstrate this relationship, the authors take into account the total number of graduates as well as the number of graduates from different fields. Accordingly, the authors gathered graduates in four groups which are education, social sciences, technical sciences (tech) and health. In addition to investigating two-way relationship between FDI and graduates, the authors also examined the contribution of primary and secondary level education to FDI.
Design/methodology/approach
The authors use two models to investigate the bidirectional relationship between FDI inflows and graduates from four fields. In the first model, the dependent variable is FDI inflows, and in the second model, graduates from each field are the dependent variable. To investigate the dual relationship, the authors employ ordinary least squares (OLS) and two-step system generalized method of moments (GMM) developed by Arellano Bover (1995) and Blundell Bond (1998).
Findings
For the first model, the results show that secondary level and higher education have a positive impact on FDI. In terms of graduates by fields, it is seen that education and health graduates contributed the most to FDI. For the second model in which the authors analysed the effect of FDI on total graduates and graduates from different fields, the authors find that FDI positively affects the number of graduates from all fields, and the strongest effect is on graduates from the social science field.
Practical implications
Based on the results, the authors can say that well-educated people promote FDI inflows to OECD countries, and FDI is also a driving force in raising highly educated people. So, the authors think that the results will help design higher education policies in accordance with FDI and higher education connection.
Originality/value
To the best of the authors’ knowledge, this paper is the first to examine the impact of FDI inflows on graduates by fields and also to investigate the impact of graduates by fields on FDI.
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This paper aims to examine and compare the impact of foreign direct investment (FDI) inflows on bank deposits in aggregate as well as at the level of conventional and Islamic…
Abstract
Purpose
This paper aims to examine and compare the impact of foreign direct investment (FDI) inflows on bank deposits in aggregate as well as at the level of conventional and Islamic banks in Middle East and North Africa (MENA) countries. The study also tests hypotheses of direct and indirect impacts of FDI flow and FDI stock on bank deposits.
Design/methodology/approach
Static and dynamic panel generalized methods of moments (GMM) estimation techniques are applied to analyze a large data set of 491 commercial banks (422 conventional banks and 69 Islamic banks) across 18 MENA countries between 1993 and 2017 (12,275 year observations).
Findings
Empirical results indicate that inflowing FDI flow and FDI stock have a significant negative direct impact on deposits of MENA banks. The results lend support for the direct channel hypothesis for the effect of FDI on bank deposits and find no evidence in support of the indirect channel hypothesis. FDI inflows affect bank deposits directly via increased FDI-related excessive competition in the banking market. Deposits from conventional banks appear to be more affected than those from Islamic banks. The variation may due to the fact that Islamic banks have fewer multinational corporations (MNC) customers than conventional banks and therefore are less sensitive to fluctuations in FDI.
Practical implications
From this analysis, this study concludes that foreign investments have a higher productivity than local investments in MENA region. Attracting more FDI is aimed at increasing overall national productivity through competition. However, governments would be wise to enact such a policy to maximize benefits and minimize potential harm to local industry. Furthermore, FDI policy should encourage small to medium-size banks and firms (SMEs)’ participation and linkage with multinational banks and MNCs, while upgrading research and development institutions and innovation activities to help SMEs to benefit from potential spillovers from foreign presence in the industry. In addition, the linkage and connection between SMEs and foreign firms should be strengthened and promoted by government policy.
Originality/value
This study is the first of its kind to examine the effect of FDI inflows on bank deposits. It also provides an in-depth quantitative analysis of the impact of FDI flow and FDI stock, separately, on bank deposits for both conventional and Islamic banks. It distinguishes between direct and indirect channels through which FDI inflows may affect bank deposits. The study analyzes 25 years of panel data for 491 banks (12,275 year observations) and uses both static and dynamic panel GMM estimation techniques to analyze the data.
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Nufazil Altaf and Farooq Ahamad Shah
The purpose of this paper is twofold: first, to investigate the relationship between ownership concentration and firm performance and, second, to determine the moderating role of…
Abstract
Purpose
The purpose of this paper is twofold: first, to investigate the relationship between ownership concentration and firm performance and, second, to determine the moderating role of investor protection quality on the ownership concentration-performance relationship from a dynamic perspective.
Design/methodology/approach
The study is based on secondary financial data of 236 Indian manufacturing firms obtained from CAPITALINE database, pertaining to a period of five years. This study uses ordinary least squares, fixed effects and two-step generalized method of moments (GMM) techniques to arrive at results.
Findings
Results of the study confirm the inverted U-shaped relationship between ownership concentration and firm performance and a significant positive effect of investor protection quality on firm performance. With regard to moderating role of investor protection quality on ownership concentration–performance relationship, results show that investor protection quality would significantly moderate the ownership concentration–performance relationship.
Originality/value
The study is a pioneer in proving that an inverted U-shaped relationship exists between ownership concentration and firm performance in an emerging market in general and India in particular. This study extends the corporate governance literature by examining ownership concentration–performance relationship in a dynamic perspective and in an unexplored market.
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Fanyu Chen, Siong Hook Law, Zi Wen Vivien Wong and W.N.W Azman-Saini
This study aims to examine the effects of institutions on private investment (PI) using panel data analysis, where the sample countries consist of 100 countries around the world…
Abstract
Purpose
This study aims to examine the effects of institutions on private investment (PI) using panel data analysis, where the sample countries consist of 100 countries around the world and the time period is covering from 2007 to 2016. The system generalized method of moments (GMM) estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998) is used to analyze the data sets.
Design/methodology/approach
This study uses the panel data approach to estimate the empirical model due to the panel nature of the data. In particular, due to the presence of lagged dependent variables and the ability to capture individual country-specific effects, the system GMM estimator, introduced by Arellano and Bond (1991) and further developed by Blundell and Bond (1998), is adopted to analyze the roles of institutions in PI. The system GMM is developed specifically to solve the problems of weak instruments and persistency (Blundell and Bond, 1998). Jointly, they suggest to adopt additional moment conditions where lagged difference of the dependent variable is orthogonal to the level form of the disturbances. The system GMM estimator is able to combine the moment conditions for the different models, as well as the level model, thereby (is capable of) generate consistent and efficient parameters. Due to the dynamic nature of the data, this study uses one-step and two-step system GMM to investigate the roles of institutions in PI.
Findings
The empirical results based on the two-step system GMM demonstrate that the quality of institutions plays an important role in stimulating PI. The finding is reinforced by the analysis of the institutional sub-components’ effects on PI.
Originality/value
This study is unique as its measurement of institutions is multi-dimensional (including law and order, rules and regulation, government stability, bureaucratic quality, control of corruption, socio-economic condition, etc.), and hence are more comprehensive. Second, it is different than the previous studies as its sample of countries includes both democracies and non-democracies, as well as both developed and non-developed economies in which policy implications are widely acceptable. Third, this study contributes to the policymakers especially those in the debt-ridden economies where governments are budget-tightening (limited capacity for public investment), as to which practical direction should be focused on so as to attract PI and eventually sustainable growth can take place.
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