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1 – 10 of over 193000Qazi Muhammad Adnan Hye and Irina Dolgopolova
The purpose of this paper is to construct a financial development index for China and to analyze the relationship between the financial sector development index and economic…
Abstract
Purpose
The purpose of this paper is to construct a financial development index for China and to analyze the relationship between the financial sector development index and economic growth.
Design/methodology/approach
This study uses Johansen‐Juselius cointegration approach to determine long run relationship between variables. To determine the strength of causal relationship variance decomposition is used. The stability of coefficient is evaluated through rolling window regression method.
Findings
The results of Johansen‐Juselius cointegration approach confirm long run relationship between financial development index and economic growth. Normalized cointegrating vector indicates that financial development index, real interest rate, capital and labor force positively determine economic growth in China. The yearly coefficient is provided by the rolling regression and indicates that financial development index negatively link to economic growth in 1991, 1992, 1994, 1995, 1999, 2000, 2003‐2005. Interest rate is negatively linked to economic growth in 1991‐1996, 2007 and 2008. The variance decomposition method validates that shocks in financial development index and real interest rate are explained by economic growth.
Originality/value
A financial development index for China is constructed and the relationship between economic growth and financial development is indicated.
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L. Yu. Andreeva, T. V. Epifanova, O. V. Andreeva and A. S. Orobinsky
The digital economy provides companies with financial stability and highly developed technological tools to run businesses based on their operations’ transparency. Business…
Abstract
The digital economy provides companies with financial stability and highly developed technological tools to run businesses based on their operations’ transparency. Business stability is formed due to the introduction of a competence-based management system in financial organizations in the Russian corporate sector.
In terms of the digital economy as financial and technological companies, we consider large banks and other financial organizations to develop risk-oriented technologies for managing financial stability based on digitization.
The main aim of this chapter is to describe the features, the factors, and the conditions for the competence-based management development system. It highlights the role of the system for the banks and the financial technologies used by companies for sustainable development.
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Louis David Junior Annor, Elvis Kwame Agyapong, Margarita Robaina, Elisabete Vieira and Ebenezer Bugri Anarfo
This study sought to examine the interaction between rural bank performance, information and communication technology (ICT) investment, ICT diffusion and financial development.
Abstract
Purpose
This study sought to examine the interaction between rural bank performance, information and communication technology (ICT) investment, ICT diffusion and financial development.
Design/methodology/approach
Data were sourced from the Association of Rural Banks (ARB) Apex and World Development Indicators (WDI) for the period 2014–2020. A total of 122 rural banks were used for this study. The study adopted the two-step system generalized method of moments (SGMM) estimation technique in assessing the interactions among variables.
Findings
This study found compelling evidence to support the positive effect of ICT investment on banks’ performance (return on asset and net interest margin). Further, ICT diffusion and financial development positively influence banks’ performance. The results show a positive moderating effect exerted by ICT diffusion and financial development on the impact of bank risk (bank stability) and ICT investment on all three performance measures.
Originality/value
The study focuses on the rural banking sector in the Ghanaian economy, compared to related studies that examine the subject matter for commercial banks. The moderating effects of ICT diffusion and financial development are assessed to guide policy on rural banking development in Ghana.
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Thanh Pham Thien Nguyen, Son Nghiem and Abhishek Singh Bhati
This study tests convergence in energy diversification, per-capita income and financial development and explores their interrelationships.
Abstract
Purpose
This study tests convergence in energy diversification, per-capita income and financial development and explores their interrelationships.
Design/methodology/approach
Club convergence tests, Granger tests and panel regressions are employed on 134 countries from 1995 to 2019.
Findings
While overall convergence is absent across the entire sample, countries have converged within specific clubs. Low- and lower-middle-income countries show convergence in energy diversification and per-capita income. Positive bidirectional relationships are found between energy diversification and per-capita income, and between financial development and per-capita income. A U-shaped relationship between oil prices and energy diversification is identified.
Research limitations/implications
The findings suggest that achieving a shared equilibrium in energy diversification, economic prosperity and financial development is feasible through technological progress within convergence clubs. Investments in human capital and technology are crucial prerequisites for sustainable development.
Originality/value
This study pioneers testing energy diversification, per-capita income and financial development convergence, investigating the tri-directional relationship between them, and exploring the U-shaped relationship between oil prices and energy diversification.
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Rexford Abaidoo and Elvis Kwame Agyapong
The study evaluates the role of institutional framework and macroeconomic instability on financial market development among emerging economies.
Abstract
Purpose
The study evaluates the role of institutional framework and macroeconomic instability on financial market development among emerging economies.
Design/methodology/approach
The study uses panel data compiled from 32 countries from the sub-region of Sub-Sahara Africa (SSA), covering the period starting from 1996 to 2019. Empirical analyses were carried out using the two-step system generalized method of moments (TS-GMM) statistical framework.
Findings
Reviewed results suggest that institutional quality, effective governance and corruption control have a significant positive impact on financial market development among economies in the sub-region. Further empirical estimates show that macroeconomic risk and macroeconomic uncertainty have significant adverse effects on financial market development. Additionally, reported empirical estimates suggest that an improved institutional framework has the potential to lessen the adverse effect of macroeconomic instability on financial market development among economies in the sub-region.
Originality/value
The uniqueness of this empirical inquiry compared to related studies in the present literature stems from the fact that studies employing similar empirical approaches on the subject matter for economies in the sub-region are rare. Additionally, the analysis pursued in this study employs critical variables whose impact on financial market performance in the sub-region has not been examined per our review. These variables include indexes such as macroeconomic risk and institutional quality, which are unique to this study based on their construction; these indexes are generated using a principal component analysis procedure with different underlying variables compared to what may be found in the literature.
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Shi Min How, Mamunur Rashid, Andrew Saw Tek Wei, Shamshubaridah Ramlee and Ng Yuen Yein
Islamic financial institutions (IFIs) have gained popularity recently in the Islamic countries and countries with mixed religious practices. Due to its profit–loss sharing…
Abstract
Islamic financial institutions (IFIs) have gained popularity recently in the Islamic countries and countries with mixed religious practices. Due to its profit–loss sharing partnership contracts and integrated social and risk management practices, IFI can finance financially distressed firms, and firms with specialized sectors, better than the traditional development financial institutions (DFIs). Should they need large amount of financing, both existing financially unsuccessful industries and new development initiatives can be financed with Sukuk issuance. This chapter investigates the growth of these two industries – IFIs and DFIs, with respect to various indicators, compares the initiatives that establish the dominating character of IFIs over the DFIs, discusses the reasons behind such turnaround, and the future of DFIs. IFIs have been enjoying a superior growth in assets and deposits, asset quality, risk management, and profitability over the DFIs in Malaysia. Among many, the study identifies regulatory incentives to IFIs, inefficient management of DFIs, and most importantly, a paradigm shift through Islamic finance as primary reasons behind gradual disappearance of DFIs. The next generation of IFIs will emerge as the Islamic Development Financial Institutions and may takeover the role that is played by the DFIs most recently.
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Bruno S. Sergi, Elena G. Popkova, Natalia Vovchenko and Marina Ponomareva
This chapter elaborates on the perspectives of financial development of countries of Central Asia and China through cooperation with Russia. The authors determine financial…
Abstract
This chapter elaborates on the perspectives of financial development of countries of Central Asia and China through cooperation with Russia. The authors determine financial resources for the development of the countries of Central Asia and China and figure out possible scenarios for attracting additional financial resources and conclude that financial resources have a decisive role in socioeconomic development. It is substantiated that the increase and expansion of cooperation with Russia are the preferable scenario for attracting additional financial resources. The authors recommend expanding cooperation with Russia within the implementation of the selected optimal scenario are given.
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Bruno S. Sergi, Elena G. Popkova, Anastasia A. Sozinova and Olga V. Fetisova
This chapter models industrial, tech, and financial cooperation between Russia and the countries of the Asia-Pacific region. We use several complex methods of economic and…
Abstract
This chapter models industrial, tech, and financial cooperation between Russia and the countries of the Asia-Pacific region. We use several complex methods of economic and mathematical modeling to analyze specific features of such cooperation and determine critical factors in industrial, technological, and financial development. The preferable choice for the Asia-Pacific region is cooperation with Russia, which is ready for an increase in imports of industrial and high-tech products as well as joint industrial innovational entrepreneurship. Investments would lead to synergetic effects, ensuring simultaneous industrial, technological, and financial development.
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The different methods were used to measure the impact of financial development on economic growth. This is largely due to a certain set of factors that have the influence of their…
Abstract
The different methods were used to measure the impact of financial development on economic growth. This is largely due to a certain set of factors that have the influence of their relationship. First of all, based on the research results, several groups of factors are identified that determine the nonlinear interaction of the financial sector and economic growth. This is characterized by the fact that at different values of these indicators, financial development has an ambiguous impact on economic growth. There are several such groups in total. The first ones are usually institutional factors, indicators that characterize the legal system and the level of development of social institutions. In the absence of a sufficient level of legal framework, financial markets will be unstable, which will undermine the demand for financial sector services. Countries with a high level of development of legal institutions have a guarantee for economic entities in the stable development of economic relations.
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Rihab Grassa, M. Kabir Hassan and Arja H. Turunen-Red
Although many previous studies have explored the impact of financial development in promoting economic growth, there is relatively little evidence regarding the effect of…
Abstract
Although many previous studies have explored the impact of financial development in promoting economic growth, there is relatively little evidence regarding the effect of political institutions on financial development. This chapter offers strong evidence that political Islam and democracy promote the growth of Islamic finance. The authors use a panel estimator and a sample of 13 Muslim democratic countries for the years 1985–2015 to examine the effect of Islamic political parties and democracy on Islamic finance development. The chapter’s findings provide evidences that Islamist power and democracy are key determinants of Islamic finance development in the studied countries. Moreover, democracy can be captured by political elites in emerging countries where institutions are relatively weak.
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