scholarly journals Corruption and its diverse effect on credit risk: global evidence

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Rashedul Hasan ◽  
Muhammad Ashfaq
Keyword(s):  
Credit Risk ◽  
Banking Sector ◽  
Positive Association ◽  
Weak Form ◽  
Global Perspective ◽  
Transparency International ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
The Impact ◽  
Global Evidence

AbstractCorruption has a complex relationship with economic growth. We have explored the impact of corruption on credit risk from a global perspective. The sample consists of 178 countries and covers 18 years that range from 2000 to 2017. Non-performing loan (NPL) is used as a proxy for credit risk and data regarding NPL is collected from the World Bank Database. Corruption scores are collected from the Transparency International reports. Panel regression results provide a positive association between corruption and credit risk for the global sample. Generalized Methods of Moments regression and robustness tests validate the findings. However, sub-sample analysis provides support for “grease the wheel” hypothesis for high corruption countries and indicates that corruption is beneficial in a weak form of governance and excessive regulatory pressure. This study advocate for the importance of strong governance mechanisms in high corruption countries that can minimize the impact of corruption on banking sector profitability and ensure economic development. Unlike past literature, we provide global evidence on the association between corruption and credit risk for the banking sector which allows generalizability.

The nexus of economic growth, priority sector lending and non-performing assets: case of Indian banking sector

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Dolly Gaur ◽  
Dipti Ranjan Mohapatra
Keyword(s):  
Economic Growth ◽  
Banking Sector ◽  
Dynamic Panel ◽  
Content Type ◽  
Generalized Methods Of Moments ◽  
Major Increase ◽  
Dynamic Panel Regression ◽  
Methods Of Moments ◽  
The Impact

PurposeIn recent years, the Indian banking sector is facing a major cause of concern in the form of Nonperforming Assets (NPA), and the priority sector lending (PSL) is generally recognized as the major factor contributing to it. Thus, the present study has been carried out with the objective of examining the relationship between priority sector lending and GDP growth. Thereafter, the role of PSL and certain other bank-specific, industry-specific and macroeconomic variables in determining NPA has been studied.Design/methodology/approachTaking a sample of 45 scheduled commercial banks, the study has been carried out for 14 years (2004–2018). Granger causality between PSL and GDP has been examined by applying the Dumitrescu-Hurlin test. For the purpose of investigating the impact of PSL and other determinants on NPA, both static and dynamic panel regression have been performed. Under the dynamic panel, system generalized methods of moments (S-GMM) approach has been followed.FindingsThe findings show that there exists a positive correlation and bidirectional causal relationship between PSL and GDP, which implies that PSL brings additional growth for the whole economy. In addition to it, PSL is found to be insignificant for the NPA ratio, and thus, it can be inferred that credit extended to government-specified sectors does not bring any major increase in the bad loan portfolio of banks.Practical implicationsThe policymakers and bank management can take a cue from the findings of this study to decrease the exposure to loan nonrepayment issue. The priority sectors are in need of formal credit for their growth, and since the rising population of the country can find employment in these sectors, banks should meet their credit needs while securing their position with regard to the NPA problem.Originality/valueThe issue of NPA determinants, and in particular, the contribution of priority sector lending in it has not been much explored for Indian banking sector. Also, the present study adds to the literature by using the causality approach for examining the importance of directed credit schemes for economic growth.

scholarly journals The impact of risk factors on the financial performance of the commercial banking sector in Barbados

2018 ◽  
Vol 7 (1) ◽  
pp. 76-93 ◽  
Author(s):  
Anthony Wood ◽  
Shanise McConney
Keyword(s):  
Risk Factors ◽  
Credit Risk ◽  
Financial Performance ◽  
Banking Sector ◽  
Negative Impact ◽  
Interest Rate Risk ◽  
Commercial Banking ◽  
Country Risk ◽  
Risk Variable ◽  
The Impact

The objective of this paper is to determine the impact of risk factors on the financial performance of the commercial banking sector in Barbados using quarterly data for the period 2000 to 2015. The empirical results indicate that Capital Risk, Credit Risk, Liquidity Risk, Interest Rate Risk and Operational Risk have statistically significant impacts on financial performance. The only risk variable which does not derive this result is Country Risk. In addition, of those variables which proxy external factors, only GDP Growth has a statistically insignificant influence on financial performance. Credit risk exerted a negative impact on the banks’ financial performance, thus the banks must ensure they adopt appropriate measures to minimise the impact of this risk. Higher levels of capital impacted positively on the banking sector’s profitability. This paper is the first effort employing such an extensive dataset based on Barbados’ commercial banking sector and shows the main factors that influence commercial banks’ financial performance in this developing economy.

scholarly journals Determinants of Credit Risk in the Banking Sector of Ghana: A Panel Co-integration Approach

2020 ◽  
Vol 5 (4) ◽  
Author(s):  
Thomas Appiah ◽  
Frank Bisiw
Keyword(s):  
Credit Risk ◽  
Least Squares ◽  
Banking Sector ◽  
Ordinary Least Squares ◽  
Capital Adequacy ◽  
High Rate ◽  
Long Run ◽  
Integration Techniques ◽  
The Government ◽  
The Impact

The economic development of any nation hinges on the health of its financial system. In recent years, the health of the Ghanaian Banking sector has been affected severely as a result of high levels of non-performing loans (NPLs), which has been identified as a major threat to the overall profitability and survival of banks. To minimize the impact of NPLs on the financial sector, key stakeholders such as the government, bank officials and regulators are working hard in that regard. However, any policy response aimed at dealing with the high rate of non-performing loans first requires the understanding of the underlying determinants of NPLs. Against this backdrop, this paper apply panel co-integration techniques to investigate the determinants of credit risk (NPLs) in the banking sector of Ghana.  We use NPL as a proxy to measure credit risk and assess how it is influenced by macroeconomic and bank-specific factors. A balanced panel data of 16 universal banks in Ghana from 2010 to 2016 has been analyzed using Panel co-integration techniques such as Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS). Our result shows that growth in the economy, measured by Gross Domestic Product (GDP) has significant influence on the NPLs of banks in the long-run. The results further revealed that capital adequacy, profitability and liquidity of banks are significant predictors of NPLs. However, our results suggest that bank size, inflation and interest rate have statistically insignificant influence on the NPLs of Ghanaian banks. The study recommend, among others, that whereas it is important for government and policymakers to work to improve macroeconomic outcomes, banks should also improve their capital adequacy, profitability, and efficiency position as these bank-specific interventions could significantly improve credit quality and minimize NPLs.

The Impact of Integrated UN Missions on Humanitarian NGO Security

2021 ◽  
Vol 27 (2) ◽  
pp. 202-225
Author(s):  
Emizet F. Kisangani ◽  
David F. Mitchell
Keyword(s):  
Humanitarian Aid ◽  
Aid Workers ◽  
Intrastate Conflict ◽  
Conflict Zones ◽  
Humanitarian Aid Workers ◽  
Humanitarian Action ◽  
Generalized Methods Of Moments ◽  
To Come ◽  
Methods Of Moments ◽  
The Impact

Abstract Since the end of the Cold War, the UN has extended many of its missions in conflict zones to include political, military, and humanitarian activities. Many humanitarian nongovernmental organizations have been critical of these “integrated” UN missions, claiming that they can blur the distinction between political, military, and humanitarian action, thus placing humanitarian aid workers at risk of retaliation from warring factions opposed to the UN’s political objectives. This proposition is empirically tested using generalized methods of moments statistical analysis of sixty-seven countries that experienced intrastate conflict between 1997 and 2018. When assessing attacks in general—to include the sum of aid workers killed, wounded, and kidnapped—the results indicate that humanitarian aid workers are more likely to come under attack in countries that have an integrated UN mission. However, when the attacks are assessed separately, results show that this relationship holds only with aid workers who are killed in the field.

scholarly journals The Effect of Risks on Banking Safety: Applied Study on Jordanian Traditional Banks (2005-2016)

2017 ◽  
Vol 9 (9) ◽  
pp. 102
Author(s):  
Mohammad Abdel Mohsen Al-Afeef ◽  
Atallah Hassan Al-Ta'ani
Keyword(s):  
Interest Rate ◽  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Liquidity Risk ◽  
Interest Rate Risk ◽  
Bank Credit ◽  
Applied Study ◽  
Rate Risk ◽  
The Impact

Banking sector is one of the most important sectors that support the sustainable economic development in Jordan, therefore this study aimed to test the impact of risks; (Liquidity risk, bank credit risk and interest rate risk) on the safety in the banking sector in the Jordanian commercial banks during the period 2005-2016.The results of the study showed that there is a statistically significant impact for each of liquidity risk and interest rate risk on the safety in the banking sector, and there isn't statistically significant impact for credit risk on the safety in the banking sector during the period of this study, and also find that the explanatory of model was 60.5%, which means that 39.5% due to other factors.

scholarly journals Impact of Multilateral Trade Liberalization on Resource Revenue

Economies ◽  
2018 ◽  
Vol 6 (4) ◽  
pp. 60 ◽  
Author(s):  
Sena Gnangnon ◽  
Jean-François Brun
Keyword(s):  
Trade Liberalization ◽  
Full Sample ◽  
Multilateral Trade ◽  
Domestic Trade ◽  
Generalized Methods Of Moments ◽  
Negative Effect ◽  
Multilateral Trade Liberalization ◽  
Methods Of Moments ◽  
The Impact ◽  
The Empirical Analysis

This paper investigates the impact of multilateral trade liberalization on resource revenue, using an unbalanced panel dataset comprising 57 countries, including both developed and developing countries, over the period 1995–2015. By means of the two-step system Generalized Methods of Moments (GMM) estimator, the empirical analysis suggests that multilateral trade liberalization exerts a negative effect on resource revenue, probably at the benefit of non-resource revenue. However, this effect over the full sample hides a positive effect of multilateral trade liberalization on resource revenue in poorest countries, and a negative effect of multilateral trade liberalization on resource revenue in non-poorest countries of the sample. Additionally, the negative effect of multilateral trade liberalization on resource revenue over the full sample appears to be dependent on the degree of domestic trade liberalization. In fact, multilateral trade liberalization genuinely induces a reducing effect on resource revenue only if countries liberalize their domestic trade regime beyond a minimum level.

scholarly journals The Threats of Unsystematic Risks in Jordanian Commercial Banking Sector

2017 ◽  
Vol 9 (9) ◽  
pp. 175
Author(s):  
Ghaith N. Al-Eitan ◽  
Ismail Y. Yamin
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Banking Sector ◽  
Fixed Effect Model ◽  
Commercial Banking ◽  
Capital Adequacy ◽  
Credit Risk Management ◽  
Effect Model ◽  
The Impact ◽  
The Empirical Analysis

The objective of this study is to empirically examine the effect of unsystematic risks on the performance of commercial banks in Jordan, using panel data for the period of 10 years (2005-2015). The study uses earning per share and dividends as dependent variables to represent Banks’ performance. The empirical analysis based on the fixed effect model selected on the basis of Hausman test. The results indicate that the impact of Non-performing loans on commercial banks’ dividends is positive and significant while the impact of capital adequacy is negative and statistically significant on dividends. The results indicate that the credit risk, liquidity risk, non-performing loan and capital adequacy have significant effect on earnings per share and the effects are negative as expected. Based on the study it is recommended that the Jordanian commercial banks needs enhance the process of credit risk management to determine loan defaulter and impose the appropriate legal action against them.

scholarly journals The The Impact of Liquidity, Credit, and Financial Leverage Risks on Financial Performance of Islamic Banks: A Case of Sudanese Banking Sector

2020 ◽  
Vol 2 (2) ◽  
pp. p59
Author(s):  
Ahmed Nourrein Ahmed Mennawi
Keyword(s):  
Credit Risk ◽  
Financial Performance ◽  
Banking Sector ◽  
Negative Impact ◽  
Liquidity Risk ◽  
Positive Influence ◽  
Islamic Banks ◽  
Financial Leverage ◽  
Loan Financing ◽  
The Impact

This study aims to investigate the impact of liquidity, credit, and financial leverage risks on the financial performance of Islam banks in Sudan during the period of 2008 - 2018. Panel dataset of 143 observations from (13) banks has been used in this study. Two models of ROA and NPM have been constructed using robust random effects estimates for testing the study hypotheses. The independent variables consist of liquidity and credit risks plus the financial Leverage ratio. Credit risk that measured by nonperformance of loan (financing) and provision of loan (financing) loss ratios; while the liquidity risk measured by cash to deposits ratio, liquid assets to total assets ratio and total loan (financing) to total deposits ratio. The financial performance of Islamic banks in Sudan measured by the ratios of return on assets and net profit margin. The results reveal that the credit risk and financial leverage have significant and negative impact on the financial performance of Islamic banks in Sudan, whereas the liquidity risk generally found to be insignificant. Despite that, the liquidity risk in term of liquid assets to total assets ratio provides a significant and positive influence on the financial performance of Sudanese banks. Finally, the importance of this study is that it touches the most significant types of risks that Sudanese Islamic banks face during their operational cycles.

scholarly journals The Islamic Banking Sector Of Pakistan: The Impact Of Leadership Opportunities, Gender Differences, Working Conditions And Employee Performance On Job Satisfaction Of Female Employees Of The Industry

2020 ◽  
Vol 20 (2) ◽  
pp. 139-158
Author(s):  
Sobia Iqbal ◽  
Khalid Mehmood Iraqi
Keyword(s):  
Job Satisfaction ◽  
Gender Differences ◽  
Banking Sector ◽  
Employee Performance ◽  
Positive Association ◽  
Working Environment ◽  
Islamic Banking ◽  
Upper Management ◽  
Leadership Opportunities ◽  
The Impact

The findings of this research study is constructed depending the role of women in Islamic Banking industry of Pakistan. It has been conducted with an objective to determine the contrast of leadership opportunities, gender differences, working condition, employee performance with Job Satisfaction. The data has been collected from 200 male and female participants, representing the Islamic Banking Sector of Pakistan (Meezan Bank, Dubai Islamic Bank and Bank Islami). The result of the research shows a positive association in the selected dependent and independent variables. The study result further supports that in the current scenario the male gender participation for authoritative and leadership position is comparatively high as paralleled to female in the Pakistani Islamic Banking Sector of Pakistan. Further, it reveals that male working employees in the Islamic banking sector of Pakistan are far more satisfied as compared to female working participants. The result has reflected that the constructed model is significant (at the p < 0.001 level).  The findings of this particular study possibly may assist the upper management to revisit their working environment policies and practices to consider females as equally responsible for challenging leadership roles, providing career path opportunities, and to promote Equal Employment Opportunities (EEO) in organizations.

scholarly journals Risk, competition, efficiency and its interrelationships: evidence from the Chinese banking industry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yong Tan ◽  
Vincent Charles ◽  
Doha Belimam ◽  
Shabbir Dastgir
Keyword(s):  
Credit Risk ◽  
Banking Sector ◽  
Banking Industry ◽  
Bank Competition ◽  
Content Type ◽  
Frontier Analysis ◽  
Different Types ◽  
Chinese Banking Industry ◽  
The Impact ◽  
Chinese Banking

PurposeThis study investigates the interrelationships between efficiency, competition and risk in the Chinese banking industry.Design/methodology/approachParametric stochastic frontier analysis is used to estimate bank efficiency; the Lerner index is used as the competition indicator; accounting ratios and a translog function are used to measure different types of risk and finally, the three-stage least square estimator is used to investigate the interrelationships.FindingsThe results of this study show that the impact of competition on different types of risk is significant and positive, while there is a significant and positive impact of credit risk, liquidity risk and capital risk on bank competition. In addition, the findings demonstrate that the interrelationships between efficiency and competition are significant and negative. The authors do not find any robust interrelationships between different types of risk and different types of efficiency; the authors find that diversification and higher levels of profitability reduce bank credit risk. The results suggest that a higher developed banking sector reduces the level of bank competition in China.Originality/valueThis is the first piece of research that comprehensively investigates the interrelationships between different types of risk, competition and different efficiencies in China.

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