scholarly journals Does Institutional Quality Matter in the Relationship Between Competition and Bank Stability? Evidence from Asia

2021 ◽  
Vol 36 (3) ◽  
pp. 283-301
Author(s):  
Muizzuddin Muizzuddin ◽  
Eduardus Tandelilin ◽  
Mamduh Mahmadah Hanafi ◽  
Bowo Setiyono
Keyword(s):  
Rule Of Law ◽  
Negative Impact ◽  
Generalized Method Of Moments ◽  
Institutional Quality ◽  
Political Stability ◽  
Bank Stability ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Regulatory Quality ◽  
The Relationship

Introduction/Main Objectives: This study aims to investigate whether competition impacts bank stability. Furthermore, the study also analyzes the role of institutional quality in a country, such as voice and accountability, political stability, government effectiveness, regulatory quality, the rule of law, and control of corruption, forming the effect of competition on bank stability. Background Problem: Analysis of the relationship between competition and bank stability has been at the center of academic and policy debate. However, the theoretical and empirical research has not concluded whether bank competition leads to more or fewer stable banks. Novelty: We consider institutional quality's role in mitigating the negative impact of competition on bank stability, which has mainly been under-elaborated in prior studies, particularly in using measures from The World Bank’s Worldwide Governance Indicators, which measure how the institutions of each country influence bankers’ and the people's behavior, as part of the cultural system. Research Methods: Using a sample of 427 Asian commercial banks from 2011 to 2019, we employ the generalized method of moments (GMM) estimator and consider loan growth and the cost to income ratio as instrumental variables. Findings/Results: We find robust evidence that competition erodes bank stability. Besides, better institutional quality, especially government effectiveness, regulatory quality, the rule of law, and corruption control in each country are important aspects that promote bank stability and mitigate the negative impact of competition on bank stability. Conclusion: Competition has a negative impact on bank stability. Meanwhile, the quality of institutions can both promote bank stability and mitigate this negative relationship.

scholarly journals Does Higher Religiosity Translate into Higher Institutional Quality? Evidence From 98 Countries

SAGE Open ◽  
2019 ◽  
Vol 9 (3) ◽  
pp. 215824401986580
Author(s):  
Ayse Y. Evrensel ◽  
Itai Sened
Keyword(s):  
Rule Of Law ◽  
Institutional Quality ◽  
World Values Survey ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Country Level ◽  
Regulatory Quality ◽  
Moral Standards ◽  
Corrupt Behavior ◽  
Government Benefits

This article examines whether individuals’ higher moral values stemming from higher religiosity lead to higher institutional quality at the country level. Based on the data from World Values Survey (WVS, 1980-2014) with 343,440 respondents, the results indicate that higher religiosity is associated with lower justifiability of corrupt behavior such as cheating on taxes, receiving false government benefits, and taking bribes. However, at the level of 98 countries from which the respondents in the WVS stem, higher religiosity seems to have an adverse effect on institutional quality as measured in corruption control, executive constraints, government effectiveness, regulatory quality, and the rule of law. Therefore, higher religiosity and moral standards at the respondent level may not translate into higher institutional quality at the country level. We discuss possible reasons for this discrepancy.

scholarly journals Increasing Supply of Tradable Goods in the Common Market for Eastern and Southern Africa (COMESA)

2015 ◽  
Vol 1 (2) ◽  
pp. 73-117
Author(s):  
Macleans Mzumara
Keyword(s):  
Foreign Direct Investment ◽  
Rule Of Law ◽  
Direct Investment ◽  
Institutional Quality ◽  
Political Stability ◽  
Government Effectiveness ◽  
Regulatory Quality ◽  
Tradable Goods ◽  
And Control ◽  
Control Of Corruption

The author investigated the nature of institutional quality in the Common Market for Eastern and Southern Africa (COMESA) on the basis of voice and accountability political stability, government effectiveness, regulatory quality, rule of law and control of corruption. The author further investigated the existence of a link between institutional quality and factors of production. The results show that capital, entrepreneurship and foreign direct investment are the major determinants of production of tradable goods in COMESA. In exception of Mauritius and Namibia (currently no longer a member) the rest of COMESA member states have very poor institutional quality. This affects their ability to attract foreign direct investment hence production of tradable goods. Voice and accountability, government effectiveness, rule of law and political stability play a major role in increasing production of tradable goods in COMESA. Foreign direct investment is affected by voice and accountability, rule of law and political stability than any other factors. Availability of raw material is affected by government effectiveness, regulatory quality, political stability, voice and accountability and control of corruption. Capital is very sensitive to issues of voice and accountability and control of corruption and regulatory quality.

scholarly journals Economic growth and institutional quality in South East Europe

2021 ◽  
Vol 69 (3-4) ◽  
pp. 1-13
Author(s):  
Jelena Minović ◽  
Vesna Aleksić ◽  
Slavica Stevanović
Keyword(s):  
Economic Growth ◽  
Rule Of Law ◽  
Growth Control ◽  
Institutional Quality ◽  
Political Stability ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
East European ◽  
South East Europe ◽  
Control Of Corruption

The paper researched the causal relationship between institutional quality measures and real gross domestic product growth (GDP) on the South East European (SEE) countries in the period 1996-2016. To achieve the aim of this research the panel techniques (the Dumitrescu-Hurlin noncausality approach) were used. The SEE suffers from very poor control of corruption, as well as significant political instability, the weak rule of law and poor government effectiveness. Our results indicate that there is unidirectional homogeneous causality between political stability and real GDP growth. Control of corruption leads to government effectiveness. The rule of law leads to control of corruption, and government effectiveness to political stability. Additionally, there is a bidirectional homogeneous causality between the rule of law and political stability. Thus, the research found some empirical evidence that stronger institutional measures cause higher economic growth.

scholarly journals The Effect of Institutional Quality on Bank Lending in the Gulf Cooperation Council Countries

2016 ◽  
Vol 12 (1) ◽  
Author(s):  
Azmat Gani ◽  
Saeed Al-Muharrami
Keyword(s):  
Rule Of Law ◽  
Institutional Quality ◽  
Bank Lending ◽  
Gulf Cooperation Council ◽  
Regression Equation ◽  
Reduced Form ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Regulatory Quality ◽  
Cross Country

AbstractThis paper examines the effect of institutional quality on lending by banks in Gulf Cooperation Council (GCC) group of countries. The methodology included the estimation of a reduced form regression equation utilizing cross country data for a range of variables capturing institutional quality. The empirical findings provide evidence that conventional institutional quality measured by: the time taken to enforce a contract, regulatory quality, the rule of law and government effectiveness; are inversely correlated with the lending by the banks, among other factors. Interestingly, our findings revealed that

scholarly journals Public Governance and Economic Growth: Conceptual Framework

2019 ◽  
Vol 2 (2) ◽  
pp. 1-15
Author(s):  
Maryam Hasan Al-Naser
Keyword(s):  
Economic Growth ◽  
Conceptual Framework ◽  
Rule Of Law ◽  
Future Research ◽  
Public Governance ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Regulatory Quality ◽  
The Relationship ◽  
Control Of Corruption

This paper aims to provide a theoretical review of the relationship between public governance and economic growth and establishes future research in this field. In this paper, we discussed six principles of public governance: accountability and transparency, the rule of law, control of corruption, regulatory quality, government effectiveness and equality and inclusiveness.

scholarly journals Finance, governance and inclusive education in Sub-Saharan Africa

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Simplice A. Asongu ◽  
Nicholas M. Odhiambo
Keyword(s):  
Secondary Education ◽  
Inclusive Education ◽  
Rule Of Law ◽  
Generalized Method Of Moments ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Credit Access ◽  
Government Effectiveness ◽  
The Rule Of Law ◽  
Sub Saharan

Purpose The purpose of this paper is to assess the importance of credit access in modulating governance for gender-inclusive education in 42 countries in Sub-Saharan Africa with data spanning the period 2004–2014. Design/methodology/approach The generalized method of moments is used as empirical strategy. Findings The following findings are established: First, credit access modulates government effectiveness and the rule of law to induce positive net effects on inclusive “primary and secondary education.” Second, credit access also moderates political stability and the rule of law for overall net positive effects on inclusive secondary education. Third, credit access complements government effectiveness to engender an overall positive impact on inclusive tertiary education. Originality/value Policy implications are discussed with emphasis on sustainable development goals.

scholarly journals Institutional Analysis of Shadow Economy (Study on ASEAN 7 Developing Countries)

2020 ◽  
Vol 15 (1) ◽  
pp. 55
Author(s):  
Ana Rahmawati Wibowo ◽  
Wiwin Indrayanti
Keyword(s):  
Developing Countries ◽  
Rule Of Law ◽  
Shadow Economy ◽  
Secondary Data ◽  
Political Stability ◽  
Government Effectiveness ◽  
Regulatory Quality ◽  
Negative Effect ◽  
And Control ◽  
Control Of Corruption

This study aims to analyze the institutional variables of governance in ASEAN 7 developing countries. The independent variables consist of Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption, while shadow economy is dependent variable. The data used in this study are quantitative data and secondary data by using program Stata 14, the analysis technique used is multiple linear regression panel data. The results show that Voice and accountability has a negative and significant effect on the shadow economy as well as Political stability, Government effectiveness and Control of corruption on the other side. Regulatory quality has a positive and significant effect on the amount of shadow economy. Meanwhile, Rule of law no significant effect on the shadow economy. Underlying the results, the study arranges some policy to reduce negative effect of shadow economy.

scholarly journals Rule of Law, Corruption Control, Governance, and Economic Growth in Managing Renewable and Nonrenewable Energy Consumption in South Asia

2021 ◽  
Vol 18 (20) ◽  
pp. 10637
Author(s):  
Haider Mahmood ◽  
Muhammad Tanveer ◽  
Maham Furqan
Keyword(s):  
Economic Growth ◽  
Renewable Energy ◽  
Energy Consumption ◽  
Rule Of Law ◽  
Political Stability ◽  
Energy Sources ◽  
The Rule Of Law ◽  
Governance Indicators ◽  
Regulatory Quality ◽  
Nonrenewable Energy

Strong governance is vital for developing environmental policies to promote renewable energy consumption and discourage nonrenewable energy sources. The present research explores the effect of economic growth and different governance indicators on renewable and nonrenewable energy consumption in Pakistan, India, Bangladesh, and Sri Lanka using data from 1996 to 2019. For this purpose, the study uses different econometric techniques to find the long-term effects of the rule of law, regulatory quality, corruption control, government effectiveness, political stability, voice and accountability, and economic growth on oil, natural gas, coal, hydroelectricity, and renewable energy consumption. The results show that economic growth has a positive impact on all investigated renewable and nonrenewable energy sources. Additionally, regulatory quality measures also increase all types of renewable and nonrenewable energy consumption. Except for natural gas, the impact of the rule of law is negative, and government effectiveness positively affects all energy sources. Control of corruption has a positive effect on natural gas consumption. Political stability has a negative effect on nonrenewable energy sources and a positive impact on renewable energy sources. The magnitudes of the effects of economic growth and most governance indicators are found to be larger on nonrenewable sources than renewable sources. The testing of the energy consumption and governance nexus is scant in global literature and is missing in South Asian literature. Hence, the study results contribute to how South Asian economies can be more sustainable in energy use by enhancing governance indicators in the economies. Particularly, the results imply that these countries should focus on improving the rule of law, corruption control, governance, regulatory quality, political stability, and economic growth to help maintain a sustainable balance of renewable and nonrenewable energy sources. Moreover, this issue needs further attention in developing countries, as governance indicators would play an effective role in promoting sustainable energy.

scholarly journals The Governance and Tourism: A Case of Developing Countries

2021 ◽  
Vol 9 (3) ◽  
pp. 199-213
Author(s):  
Rana Ejaz Ali Khan ◽  
Tusawar Iftikhar Ahmad ◽  
Jaweria Haleem
Keyword(s):  
Rule Of Law ◽  
Good Governance ◽  
Developing Economies ◽  
Trade Openness ◽  
Tourism Development ◽  
Political Stability ◽  
Method Of Moment ◽  
Total Employment ◽  
Government Effectiveness ◽  
Regulatory Quality

Tourism is a rapidly growing industry globally and it is contributing a significant part in the GDP of the economies. In the literature, a variety of determinants of tourism are discussed theoretically and empirically but the effect of national governance on tourism is rarely discussed. This study investigates the effect of governance on tourism development in a panel of 65 developing economies for the time period of 2000-2015. Tourism development is measured by an index of three components, i.e. spending by international tourists, spending by local tourists and tourism’s share in total employment in the economy. For governance an index is constructed based on indicators of government effectiveness, political stability, regulatory quality, rule of law, and voice and accountability. Data has been taken from World Development Indicators (WDI), Worldwide Governance Indicators (WGI) and World Travel and Tourism Council (WTTC). Generalized Method of Moment (GMM) estimation indicates that governance positively influence tourism development and its components, i.e. foreign visitors spending, domestic tourist spending and contribution of tourism in employment. The indicators of governance, i.e. government effectiveness, political stability, regulatory quality, rule of law and voice and accountability also positively affect tourism development. Terrorism, environmental degradation and corruption have shown adverse effect on tourism development as well as components of tourism development. The economic growth and trade openness have encouraging effect on tourism development and its comments. It is concluded that through good governance tourism may be developed but terrorism and corruption are needed to be eliminated.

scholarly journals Institutional Quality and Sukuk Development: A Study of Five OIC Countries

2020 ◽  
Vol 5 (3) ◽  
pp. 286
Author(s):  
Nuhbatul Basyariah ◽  
Hadri Kusuma ◽  
Ibnu Qizam
Keyword(s):  
United Arab Emirates ◽  
Rule Of Law ◽  
Institutional Quality ◽  
Three Dimensions ◽  
Method Of Moment ◽  
Government Effectiveness ◽  
Governance Indicators ◽  
Regulatory Quality ◽  
Panel Data Regression ◽  
Data Regression

The objective of this study is to shed some light on the effect of institutional quality on the development of the global sukuk market. Specifically, this study examines the impacts of the institutional quality that adopts three dimensions of the Worldwide Governance Indicators (WGI), i.e., Rule of Law (RL), Regulatory Quality (RQ), and Government effectiveness (GE) on the global sukuk development of the top-five countries of sukuk issuance, i.e., Malaysia, Kingdom of Saudi Arabia, United Arab Emirates, Indonesia, and Bahrain. Drawing on a quantitative study with the data in the forms of global sukuk issuance from 2002 to 2017, panel-data regression (OLS) and General Method of Moment (GMM) were applied. This study showed that RL and GE have a significantly positive effect on sukuk issuance; however, RQ did not influence the development of the global sukuk market. These results imply that a country that is capable to maintain the institutional quality, especially in terms of rule of law and government effectiveness, will most likely be the country that can successfully develop the sukuk market. These results play a crucial role in filling a research gap among previous studies and provide an empirical evidence of the government’s role and its influence on the sukuk development.

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