Competition and financial institutions and markets development: a dynamic panel data analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Walid Abdmoulah
Keyword(s):  
Sensitivity Analysis ◽  
Developing Countries ◽  
Panel Data ◽  
Financial Markets ◽  
Financial Development ◽  
Financial Institutions ◽  
Positive Impact ◽  
Market Competition ◽  
2008 Financial Crisis ◽  
Content Type

Purpose This study aims to shed new light on the nexus between market competition and financial development (FD), using the new FD index developed by the IMF, covering financial institutions and markets access, depth and efficiency. Design/methodology/approach The author uses panel data from 140 countries over 2000–2014 period and a dynamic generalized method of moments (GMM) model, along with a sensitivity analysis over 2008 financial crisis. Findings Strong evidence of the positive impact of market competition, as measured by Boone index, on financial institutions and markets development is found, whereas banks concentration has a damaging effect on FD. Commonly used Lerner index is found to be irrelevant. Interestingly, none of the competition indexes in this study affects financial institutions returns, which hold even over 2008 financial crisis, likely at the expense of depth and access in developing countries. Institutions, as proxied by control of corruption, have broader positive impact on FD, particularly on financial markets. These findings have important implications for developing countries keen to foster the development of their financial system. Practical implications Policymakers should take into consideration that FI are unlikely to undertake deep improvements in terms of credit allocation depth and inclusion on a volunteer basis, unless constrained by regulations. When promoting bank competition, it is recommended to diversify methods targeting market competition, notably by promoting financial business diversification and intermediary efficiency, and tackling collusion arrangements or interest groups influence. Second, it is important to support households and small and medium enterprises’ access to finance. Third, it is highly recommended to promote good institutions given their overall beneficial role in promoting the financial system as a whole, notably financial markets. Originality/value To the best of the author’s knowledge, this study is the first to fully use the new IMF Financial Development index. It covers financial institutions and markets access, depth and efficiency, whereas most of previous findings focus on access to credit or cost of credit. Besides, the study uses a larger panel data from 140 countries over 2000–2014 period and a dynamic GMM estimator, along with a sensitivity analysis over (2007–2009) crisis. By exploring the impact of three different competition indicators, namely, Boone, Lerner and banks concentration indexes, the study responds to the concerns regarding the limitations of each of them.

Impacts of remittances on financial development

2020 ◽  
Vol 47 (3) ◽  
pp. 467-477
Author(s):  
SeyedSoroosh Azizi
Keyword(s):  
Developing Countries ◽  
Interest Rates ◽  
Financial Development ◽  
Positive Impact ◽  
National Income ◽  
Fixed Effect Model ◽  
Content Type ◽  
International Remittances ◽  
Long Run ◽  
Percent Increase

PurposeThe purpose of this paper is to examine the impacts of international remittances on financial development in developing countries.Design/methodology/approachThe focus is on a panel of 124 developing countries for the period 1990–2015. The empirical evidence is based on the instrumental variable-fixed effect model.FindingsResults obtained in this study indicate that a 10 percent increase in the remittance to GDP ratio leads to 1.7 percent increase in domestic credit to private sector, 1.9 percent increase in bank credit, 1.2 percent increase in bank deposit, and 0.8 percent increase in liquid liabilities. The positive impact of remittances on financial development in developing countries is particularly important because financial development fosters long-run growth and reduces poverty.Originality/valueTo address the endogeneity of remittances, the study estimates bilateral remittances and use them to create weighted gross national income per capita and real interest rates of remittance-sending countries. To the best of the author’s knowledge, this is the first study to assess the endogeneity of remittances in this way.

The macro talent management, decent work and national well-being nexus: a cross-country and panel data analysis

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Alex Anlesinya ◽  
Kwesi Amponsah-Tawiah ◽  
Philip Kofi Adom ◽  
Obi Berko Obeng Damoah ◽  
Kwasi Dartey-Baah
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Well Being ◽  
Talent Management ◽  
Macro Level ◽  
Decent Work ◽  
Content Type ◽  
Economic Well Being

PurposeThere is a paucity of research on the causal relationships between talent management (TM), decent work and national well-being. Hence, this study examines the nexus between macro talent management (MTM) practices, decent work and national well-being.Design/methodology/approachThe authors employed longitudinal data from 77 developing countries across the globe and also utilised panel data estimators and the bootstrapping mediation method for the analyses.FindingsThe results indicated that macro-level TM strategies can have a positive impact on decent work. Decent work also significantly improves national well-being (both subjective and economic well-being) over time as it shows a significant positive impact on change in national well-being measures. Furthermore, decent work serves as a mechanism that links MTM to improved national well-being at the macro level.Practical implicationsTM investments by governments can empower citizens to escape the tragedy of vulnerable and low-quality employment and well-being deficit as it has the potential to improve decent work and national well-being as enshrined in the Sustainable Development Goals (SDGs).Originality/valueBeyond the myopic organisational and managerialist view, the authors show that TM can have a positive spillover impact on people and the general society across time by enhancing decent work opportunities to improve both subjective and economic well-being of citizens in a country. Additionally, because decent work has psychosocial and economic dimensions, this study has revealed a complex and compelling conduit for translating the gains of macro-level TM strategies to improve national well-being. Moreover, it provides original empirical evidence to expand the limited longitudinal TM literature. Lastly, it adds to knowledge in the developing countries' context.

Financial development – does it lessen poverty?

2017 ◽  
Vol 44 (1) ◽  
pp. 69-86 ◽  
Author(s):  
Abdul Rashid ◽  
Maurizio Intartaglia
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Financial Development ◽  
Poverty Reduction ◽  
Financial Sector ◽  
Set Covering ◽  
Content Type ◽  
Specific Effects ◽  
The Impact ◽  
Country Specific

Purpose The purpose of this paper is to empirically examine the impact of financial development on poverty reduction in developing countries. The paper also investigates whether financial development affects poverty via institutional quality and GDP growth. Design/methodology/approach To take into account the dynamics nature of panel data and country-specific effects, the authors use a two-step system GMM estimator. The authors also employ a large array of measures of financial development in order to check the robustness of the results. The analysis is carried out for a sample of developing countries using an unbalanced panel data set covering the period 1985-2008. Findings The authors find that financial development plays a significant role in reducing absolute poverty. However, the authors do not find any pro-poor impact of financial development when poverty is measured in relative terms. The authors show that the impact of financial development on poverty alleviation is statistically significant when liquid liabilities and credit granted to the private sector are used as a proxy of financial development. The results on the indirect effect of financial development indicate that financial sector development has larger effects on poverty reduction when institutional arrangements are sound or/and when economic growth is high. Practical implications The findings suggest that the inference for a pro-poor effect of financial development depends primarily on the measure of poverty and the choice of the proxy for financial development. Banking sector reforms may be an effective instrument to tackle absolute levels poverty. However, the policy makers should not rely only on financial reforms, regardless of whether they are based on banks or stock markets, to narrow the gap between the poorest quintile of the population and the richer quintiles. Rather, they should also utilize fiscal policies, such as progressive taxation and public-expenditure projects, to redistribute resources. Originality/value The paper differs from the previous studies in several ways. First, it studies the financial development-poverty nexus using three alternative indices of poverty. Second, this study focusses on a sample of developing countries only. As the structure and development level of the financial sector in poor and rich countries could differ significantly, focussing on developing countries helps mitigate the problem of heterogeneity arising from using a pooled sample of rich and poor countries. Third, robust estimation methods are applied that take into account the dynamic nature of empirical models and country-specific effects.

The geographies of corruption in Nigeria: understanding the patterns and correlates

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Richard Adeleke ◽  
Opeyemi Alabede ◽  
Tolulope Osayomi ◽  
Ayodeji Iyanda
Keyword(s):  
Positive Impact ◽  
Market Competition ◽  
State Level ◽  
Well Being ◽  
Moran’S I ◽  
Market Size ◽  
National Bureau ◽  
Moran's I ◽  
Content Type ◽  
Domestic Debt

Purpose Globally, corruption has been identified as a major problem. Even though corruption is widespread, it varies in magnitude, types and consequences. In Nigeria, corruption is endemic, and it is responsible for the many socioeconomic problems in the country. Hence, the study aims to determine the patterns and state level correlations of corruption in Nigeria. Design/methodology/approach Data for this study were sourced from the National Bureau of Statistics and other official sources and were analyzed with Global Moran’s I, Local Moran’s I and multivariate step-wise regression. Findings This study’s findings revealed significant clustering of corruption in the country with Rivers States as the only hotspot (I = 0.068; z = 2.524; p < 0.05), while domestic debt and market size were the state level significant predictors. Research limitations/implications Only bribery as a form of corruption was examined in this study, more studies are needed on the predictors of other forms of corruption. Practical implications This study recommends increased market competition through investment grants, subsidies and tax incentives to facilitate trade interactions among Nigerians, which can lead to exchange of cultural norms that discourage corruption. It is also advocated that domestic debt must be effectively and efficiently channelled towards economic development which in the long run will have a positive impact on the socio-economic well-being of the citizens as well as drive down corrupt practices. Originality/value Although the causes of corruption have received considerable attention in the literature, little is known on the geographical distribution and the effect of market size and domestic debt on corruption in Nigeria.

Does corporate social responsibility affect dividend policy? Empirical evidence in the French context

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Olfa Ben Salah ◽  
Anis Ben Amar
Keyword(s):  
Corporate Social Responsibility ◽  
Panel Data ◽  
Social Responsibility ◽  
Dividend Policy ◽  
Least Squares Method ◽  
Positive Impact ◽  
Alternative Measure ◽  
Content Type ◽  
Corporate Social ◽  
The Impact

Purpose The purpose of this paper is to focus on the impact of corporate social responsibility (CSR) on dividend policy in the French context. In addition, the authors seek to determine if the individual components of CSR influence dividend policy. Design/methodology/approach This study uses panel data methodology for a sample of French non-financial firms between 2008 and 2018. Generalized least squares method is used to estimate the models. Findings Using panel data methodology for a sample of 825 observations for the period 2008–2018, this study finds a positive impact of CSR practices on dividend policy. The authors also find that individual components of CSR positively influence dividend policy. To check the robustness of the results, this study further runs a sensitivity tests, including an alternative measure of dividend policy, all of which confirm the findings. Practical implications This study has examined the impact of CSR on dividend policy in France and may have implications for regulatory, investors, analysts and academics. First, the involvement in CSR best practices encourages companies to pay more dividends to investors. Therefore, investors are more motivated to invest in socially responsible firms than socially irresponsible firms. Second, given the association of CSR with the quality of accounting information and financial markets, regulators should step up recommendations relating to the different societal dimensions of CSR. Originality/value While little previous work has focused on the causal link between CSR and dividend policy, this research is the first, to the authors’ knowledge, to have looked at the impact of CSR on dividend policy in France.

The effect of supplier globalization on firm innovation: a resource dependence theory perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yibo Wang ◽  
Bai Liu
Keyword(s):  
Resource Dependence ◽  
Positive Impact ◽  
Market Competition ◽  
Effective Means ◽  
Resource Dependence Theory ◽  
Institutional Distance ◽  
Foreign Firms ◽  
Firm Innovation ◽  
Content Type ◽  
Dependence Theory

PurposeEither buying or making is predicted by the existing literature for firms to reduce dependence. However, firms in the rapid globalization are found to adopt a pattern of buying and making. Specially, they critically rely on foreign firms for needed materials and goods, and invest in innovation against the uncertainty of potential supply disruptions simultaneously. Therefore, this paper seeks to investigate how the depth and width of supplier globalization shape firm innovation together. Moreover, the moderating effects of institutional distance and market competition are also examined in the paper.Design/methodology/approachGrounded on the resource dependence theory, this paper develops a theoretical framework and tests the proposed hypotheses by Poisson model using secondary data from 502 Chinese listed firms with foreign suppliers.FindingsThe depth of supplier globalization has a positive impact on firm innovation, while the width of supplier globalization weakens firm innovation. The depth and width of supplier globalization further interact negatively to influence firm innovation. Moreover, this relationship is enhanced when firms establish relationships with foreign firms with greater institutional distance and is weakened when firms face fiercer product competition.Originality/valueThe authors contribute to the literature by evidencing that the existence of foreign suppliers results in firms' enhancement of innovation to secure their operations and showing that diversifying the country origins of foreign suppliers is an effective means to reduce firms' uncertainty about supply disruption. We also advance the understanding regarding the contextual factors in which firms are more likely or less likely to manage the uncertainty about supplier globalization.

The effect of auditor narcissism on audit market competition

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hojat Mohammadi ◽  
Mahdi Salehi ◽  
Meysam Arabzadeh ◽  
Hassan Ghodrati
Keyword(s):  
Financial Markets ◽  
Significant Relationship ◽  
Design Methodology ◽  
Audit Quality ◽  
Stock Exchange ◽  
Market Competition ◽  
Competitive Pressure ◽  
Content Type ◽  
Listed Firms ◽  
Audit Market

Purpose This paper aims to assess auditor narcissism’s effect on audit market competition (auditor concentration, clients’ concentration and competitive pressure). Design/methodology/approach This paper’s method is descriptive-correlational based on published information from listed firms on the Tehran Stock Exchange from 2012 to 2018 using a sample of 188 firms (1,310 observations). The method used for hypothesis testing is linear regression using panel data. Findings The results show a negative and significant relationship between auditor narcissism and audit market competition and its indices, including auditor concentration, clients’ concentration and competitive pressure. Moreover, a positive and significant relationship was observed between audit quality and audit market competition and its indices, including auditor concentration, client concentration and competitive pressure. Originality/value To analyzes competition indices in the audit market (auditor concentration, clients’ concentration and competitive pressure). The variable is assessed once more using the exploratory factor analysis of the so-called three variables single variable, named audit market competition. So the central question of the study is investigated within a broader sense. Moreover, as the present study is carried out in the emergent financial markets with extremely competitive audit markets to figure out the effect of auditors’ intrinsic characteristics on such markets’ competitiveness, it can provide useful information in this field.

scholarly journals The Impact of Financial Development on Innovation Activities in Emerging and Developing Countries

2019 ◽  
Vol 10 (1) ◽  
pp. 112 ◽  
Author(s):  
KamiliaKamilia LoukilLoukil
Keyword(s):  
Developing Countries ◽  
Financial Development ◽  
Financial Services ◽  
Positive Impact ◽  
Threshold Model ◽  
Threshold Value ◽  
Innovation Activities ◽  
Linear Effects ◽  
Emerging And Developing Countries ◽  
The Impact

We investigate in this paper the effect of financial development on innovation in emerging and developing countries. The estimation of panel threshold model for a sample 54 countries during the period 1980-2009 shows the presence of non linear effects in the relationship between financial development and innovation. We find a threshold value of economic development below which the financial development level has no significant impact on innovation and above which financial development has a significant positive impact on innovation. In sum, our findings suggest that the presence of a healthy economic environment is crucial for financial institutions to offer high-quality financial services, promoting more innovation.

The persistent effect of banking crises on investment and the role of financial markets

2014 ◽  
Vol 6 (1) ◽  
pp. 64-77 ◽  
Author(s):  
Felix Rioja ◽  
Fernando Rios-Avila ◽  
Neven Valev
Keyword(s):  
Financial Markets ◽  
Financial Development ◽  
Banking Crisis ◽  
Banking Crises ◽  
Output Growth ◽  
Long Term Effects ◽  
Content Type ◽  
Negative Effect

Purpose – While the literature studying the effect of banking crises on real output growth rates has found short-lived effects, recent work has focused on the level effects showing that banking crises can reduce output below its trend for several years. This paper aims to investigate the effect of banking crises on investment finding a prolonged negative effect. Design/methodology/approach – The authors test to see whether investment declines after a banking crisis and, if it does, for how long and by how much. The paper uses data for 148 countries from 1963 to 2007. Econometrically, the authors test how banking crises episodes affect investment in future years after controlling for other potential determinants. Findings – The authors find that the investment to GDP ratio is on average about 1.7 percent lower for about eight years following a banking crisis. These results are robust after controlling for credit availability, institutional characteristics, and a host of other factors. Furthermore, the authors find that the size and duration of this adverse effect on investment varies according to the level of financial development of a country. The largest and longer-lasting decrease in investment is found in countries in a middle region of financial development, where finance plays its most important role according to theory. Originality/value – The authors contribute by finding that banking crisis can have long-term effects on investment of up to nine years. Further, the authors contribute by finding that the level of development of the country's financial markets affects the duration of this decrease in investment.

scholarly journals Impact of foreign direct investment, remittances and official development assistance on economic growth: panel data approach

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amna Zardoub ◽  
Faouzi Sboui
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Foreign Direct Investment ◽  
Panel Data ◽  
Direct Investment ◽  
Development Assistance ◽  
Business Environment ◽  
Official Development Assistance ◽  
Financial Flows ◽  
Content Type

PurposeGlobalization occupies a central research activity and remains an increasingly controversial phenomenon in economics. This phenomenon corresponds to a subject that can be criticized through its impact on national economies. On the other hand, the world economy is evolving in a liberalized environment in which foreign direct investment plays a fundamental role in the economic development of each country. The advent of financial flows – FDI, remittances and official development assistance – can be a key factor in the development of the economy. The subject of this article is to analyses the effect of financial flows on economic growth in developing countries. Empirically, different approaches have been employed. As part of this work, an attempt was made to use a panel data approach. The results indicate ambiguous effects and confirm the results of previous work.Design/methodology/approachThe authors seek to study the effect of foreign direct investment, remittances and official development assistance (ODA) and some control variables i.e. domestic credit, life expectancy, gross fixed capital formation (GFCF), inflation and three institutional factors on economic growth in developing countries by adopting the panel data methodology. Then, the authors will discuss empirical tests to assess the econometric relevance of the model specification before presenting the analysis of the results and their interpretations that lead to economic policy implications. As part of this work, the authors have rolled panel data for developing countries at an annual frequency during the period from 1990 to 2016. In a first stage of empirical analysis, the authors will carry out a technical study of the heterogeneity test of the individual fixed effects of the countries. This kind of analysis makes it possible to identify the problems retained in the specific choice of econometric modeling to be undertaken in the specificities of the panel data.FindingsThe empirical results validate the hypotheses put forward and indicate the evidence of an ambiguous effect of financial flows on economic growth. The empirical findings from this analysis suggest the use of economic-type solutions to resolve some of the shortcomings encountered in terms of unexpected effects. Governments in these countries should improve the business environment by establishing a framework that further encourages domestic and foreign investment.Originality/valueIn this article, the authors adopt the panel data to study the links between financial flows and economic growth. The authors considered four groups of countries by income.

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