Search results

Political instability may have far-reaching implications for economic performance. This paper aims to analyze the impact of political instability on economic growth by focusing on the case of Jordan, a small country located in the Middle East, which represents a highly political instable region.

The analysis is performed by regressing different indicators for internal and external political instability on economic growth for the period from 1980 to 2015 using the fully modified ordinary least squares approach.

The results point at a significant impact of political instability on the economic growth of the country in all the specifications considered; in particular, the analysis reveals a positive impact of external political instability indexed by border countries’ political instability and a negative impact of internal political instability, as proxied by the number of crimes and cabinet changes. Further, regarding the effect of the level of freedom, the authors find evidence for the so-called conflict perspective.

This paper is original and relevant for two main reasons. First, it adds to the debate on the effects of political instability on economic growth, and hereby, disentangles the effects of internal and external political instability. Second, it makes an important contribution by focusing on the case of Jordan, which has received little attention in the literature on political instability so far, even though political instability is a constant threat to the country.

The paper aims to test the effect of liquidity creation on profitability and stability with the moderating role of political instability and its level of implication on the overall banking sector of Pakistan.

This study uses the panel data estimation technique, including fixed- and random-effect model, by taking sample data of 28 banks of Pakistan that are providing their services from 2006 to 2019. Moreover, this study uses the Genreralized Method of Moments (GMM) estimation technique to check the robustness of the results.

The empirical outcomes of this study found a negative relationship of liquidity creation with profitability meanwhile positive relation with banking stability. However, this study shows a negative relation of political instability with liquidity creation, profitability and stability of overall banks of Pakistan.

The findings of this paper recommended the vital role of liquidity creation in the profitability and stability of banks, especially in the decision-making process of the investors and bank managers, and how it is affected strongly in the presence of an unstable political situation. These findings may be helpful for policymakers to devise appropriate policies to maintain a fair field between state authority and financial institutions and also assist in formulating strategies to strengthen the banking sector of Pakistan to avoid financial turmoil in the future.

As per the knowledge of the authors, this study is the first contribution to examine the moderating effect of political instability on liquidity creation, profitability and stability of the overall banking sector of Pakistan.

Prior studies have found evidence for the role of political instability on foreign divestment (FD) where a high level of instability encourages FD decisions. Therefore, this paper aims to examine how the food security level explains the linkage between political instability and FD.

The current study adopts the system generalised method of moment (GMM) to achieve accurate and reliable empirical evidence for 60 developing countries in the period 2011 to 2020.

The results demonstrated a negative and significant relationship between political instability and FD on food security. This suggests that political instability’s impact on divestment tends to be lower in countries with better levels of food security. Other controlled variables, such as economic growth, human capital and trade openness, also have a negative effect on FD, discouraging FD.

As a result, policymakers could take steps to ensure that food security levels reach acceptable levels, as food security has been linked to a country’s political stability.

To the authors limited knowledge, no studies have looked at the relationship between political instability and food security in determining a country’s FD. Our study aims to analyse this issue because the current global crisis, which is being caused by high food prices, will push millions of more people into severe poverty and exacerbate hunger and malnutrition

This paper aims to examine the impact of political uncertainty and instability caused by the 2011 Egyptian revolution on the corporate social responsibility (CSR) practices of Egyptian firms. The study provides empirical evidence to support the link between political instability, financial performance, stock market uncertainty and CSR in the post-revolution context of Egypt.

Data on CSR practices in Egypt were collected through a survey of Egyptian firms and content analysis of annual reports from publicly traded firms. The final survey sample consisted of 99 listed Egyptian companies. Structural equation modeling was performed to examine the relationship between the variables of this study.

The results of the study show that political instability is perceived to have a significant positive effect on the CSR practices of Egyptian firms. The results also reveal that the financial performance of firms is perceived not to be affected by the political instability after the 2011 Revolution as opposed to stock market uncertainty, which is perceived to be significantly affected. However, financial performance and stock market uncertainty have a significant positive influence on the CSR practices of Egyptian firms.

This paper capitalizes institutional theory to capture the complex interactions between organizations and their external institutional environments. Previous studies tackling CSR in unstable political environments in the African context focused on countries with prolonged periods of violent conflict and on more localized forms of conflicts. Yet, little is known about CSR during the occurrence of different types of political instabilities in other African countries.

This paper aims to examine, by way of an analytical research review, the reasons for the fluctuations in the economic growth of the country of Yemen during the period from 2000 to 2014. The authors are trying to generate the answers to the following questions: Has tourism, oil price, politically instability improved? What is the impact of tourism, oil price and politically instability on economic growth before and after turbulence time? We have found that very low number of papers have written about the topic. Yemen, as a developing country, has been under the influence of an turbulence time. The term “turbulence time” refers to the series of independent uprisings that occurred in 2010 across the Arab world. There is a lack of understanding concerning the economic growth status in the existing literature during this period.

The authors use vector error-correction model to examine the impact of candidate variables .This review and analysis could provide an additional understanding in terms of the factors contributing to economic growth in Yemen; particularly before and after the turbulence time.

Despite oil prices having appreciated and the unemployment rate having improved, particularly after the Arab Spring, political instability has dominated the scope of determinants for economic growth in Yemen. To address the objective of this study.

This paper provides an additional reference about the economic status of Yemen.

This study aims to empirically investigate the impact of political instability on the banking stability of the dual banking system in the Middle East and North African (MENA) countries.

The study measures banking stability with probability of default (PD) and Zscore by employing the generalised method of moment (GMM) between 2007 and 2021 on the dual banking system in the region. The authors further estimate short-long-run situations coupled with a robustness test using a generalised least square (GLS) model.

The authors' findings indicate that institutional factors of political stability, crisis period, high-crisis countries, law and order and macroeconomic indicators influence the two types of banking stability in the region. The authors found the consistency of the factors explaining stability in the region in both short-and long-run situations. Consequently, the study also reveals the adverse effects of crisis periods and high-crisis countries on banking stability.

The results of this study explicitly identify the critical need for sustaining political stability and abiding by laws and order to achieve dual banking stability in the region. Therefore, policymakers may consider allowing the region's banks to operate beyond retail banking since diversification enhances banking stability.

The authors' study balances by employing dual stability measurement in predicting the impact of political instability, law and order and other indicators on the MENA region's two banking models. This study uncovers the effect of the global crisis period on banking stability and high-crisis countries in the region and verifies the models' robustness.

The international business literature presents an interesting intellectual puzzle regarding the effect of political instability and political risk on foreign direct investment (FDI). Survey evidence shows that multinational executives take into account political instability in making investment decisions, while econometric studies produce conflicting findings. In this paper, I offer a new theory that explains how political violence, an extreme form of political instability, affects FDI. The new theory differs from previous arguments on three points. First, the theory considers how rational expectations and uncertainty on the part of foreign investors affect the ways in which political violence influences investment behaviors. Second, the new theoretical argument argues for the need to investigate separately the effects of different types of political violence (civil war, interstate war, and transnational terrorism). Third, I consider FDI inflows as resulting from two distinct but related decisions, including the investment location choice and the decision on investment amount, and sort out statistically the separate effects of political violence on these two processes. The empirical analysis of FDI inflows covers about 129 countries from 1976 to 1996. The statistical findings largely support my theoretical expectations. My theory helps reconcile the inconsistent econometric findings on the effect of political instability on FDI flows.

This study investigates the extent to which, and in what ways and capacities, the incidence of adverse economic conditions burdening the masses, on the macro-level, increases the propensity for the generation of political instability/violence.

Drawing on data from a cross-section of 25 Sub-Saharan African (SSA) countries for the period 2005–2019, fixed effects (FE) and generalized method of moments (GMM) estimations are used to determine the nature and significance of the independent variable (economic condition), complemented by three control variables, on the dependent WGI-defined variable political stability scored on the basis of a continuum from −2.5 (most unstable) to +2.5 (most stable). For the link between political instability and socioeconomic conditions, the study employs a construct derived from frustration-aggression and relative deprivation theory.

The study links socioeconomic adversity to political instability in the context of SSA. In addition, larger populated countries exhibit a greater propensity to political instability than smaller populated countries. In contrast, foreign direct investment (FDI) appears to have no real effect, positive or negative, on political stability.

Poor living conditions seem to be strongly associated with a high risk of political violence in SSA. To buoy socioeconomic status, poverty alleviation needs be elevated into a key initiative in the decision-making agenda, at all levels of governance, with real targeted strides achieved in terms of enhancement of the standard of living of the masses. In addition, policies that control population need to be inaugurated hand-in-hand with welfare measures and a more equitable balancing of the distribution of resources in the society.

Given the high regional incidence of civil strife and violence, combined with a dearth of research of an empirical nature on political risk in SSA, this study provides a largely ignored and useful context on SSA apart from studies on the incidence of violence that consider the developing countries as a monolithic whole.

This study attempts to figure out the factors that contributed to deposing certain elected presidents before the end of their constitutional terms, alongside tracing the new political context that prevailed in Latin America since 1978 and its impact on direct political participation and military behavior during presidential crises.

The paper uses the comparative method to investigate the causes of presidential instability in three case studies.

The likelihood of presidential instability increases when a president enacts austerity economic policies that marginalize large sectors of the citizenry, becomes implicated in acts of corruption and develops a hostile relationship with members of the ruling coalition.

This study integrates the social movement theory with analytical perspectives from parliamentary behavior to explain presidential instability. It attempts to investigate the dynamics of interaction between the acts of furious citizens and disloyal legislators through the in-depth analysis of three case studies.

The purpose of this paper is to explore the relationship between political instability upon destination image and perception and tourism consumer behavior.

The paper takes a case study approach and uses cross‐sectional and qualitative methods to measure and contrast the perceptions of respondents who have and have not, visited Thailand.

The study affirms the power of image as a subjectively‐held, but important lever of consumer behavior. The findings reinforce the popularity of Thailand as a tourist destination, by both those who have and have not visited, and suggest that its image is a strong one.

The paper concludes that destination managers need to work with governments to ensure political stability, which can lead to continued tourism revenues.

The paper suggests that the effects of adverse publicity on political instability to tourism receipts may be temporary, providing a destination has a strong perceived image (such as Thailand) and the disruption does not last too long.