scholarly journals Profitability Determinants of Big European Banks

2021 ◽  
Vol 10 (2) ◽  
pp. 39-56
Author(s):  
Vesna Karadžić ◽  
Nikola Đalović
Keyword(s):  
Fixed Effects ◽  
Negative Impact ◽  
Ordinary Least Squares ◽  
Annual Data ◽  
The European Union ◽  
Macroeconomic Factors ◽  
Panel Models ◽  
Econometric Methods ◽  
Gdp Growth Rate ◽  
The Impact

Abstract The subject of research in this paper is the profitability of the biggest banks in the European financial market, some of which operate in Montenegro. The profitability of banks is influenced by a large number of factors, including internal banking and external macroeconomic factors. The aim of this paper is to use statistical and econometric methods to examine which factors and with what intensity affect the profitability of large banks in Europe. The empirical analysis used highly balanced panel models with annual data on 47 large banks from 14 European countries over the period 2013-2018. Three static panel models were estimated and evaluated (pooled ordinary least squares, model with fixed effects and model with random effects), as well as dynamic model utilizing general methods of moments. The POLS model was chosen as the best, confirming that all macroeconomic factors have a statistically significant impact on the profitability of big banks, while the impact of internal factors, which are controlled by the bank’s management, is not significant. GDP growth rate, inflation rate and market concentration have a positive effect on profitability, while the membership of the European Union has a negative impact on profit, meaning that banks with headquarters outside the EU are more profitable.

scholarly journals Starzenie się społeczeństwa a wzrost gospodarczy w krajach Unii Europejskiej

2018 ◽  
Vol 18(33) (4) ◽  
pp. 481-492
Author(s):  
Ewa Wasilewska ◽  
Łukasz Pietrych
Keyword(s):  
Economic Growth ◽  
Old Age ◽  
Negative Impact ◽  
Gdp Growth ◽  
The European Union ◽  
Panel Models ◽  
Eu Member States ◽  
Gdp Growth Rate ◽  
Demographic Aging ◽  
The Impact

Due to the still growing demographic aging process and the significance of this process on the economy, the article analyzes relationship between the demographic aging of the European Union countries and economic growth. The aim of the research was to determine the impact of demographic aging on the rate of economic growth in the EU27. The research period covered the years 2000-2015. Data from the Eurostat and the World Bank databases were used. The study adopted a division into the “old” and “new” EU Member States. The rate of GDP growth was taken as the measure of economic growth, while the measures of demographic aging included the old-age rate (percentage of population aged 65 or over) and the venerable senility rate (share of the population at the age of 80 or more in the general number of population). Panel models were used. It was found that the demographical aging of society negatively correlates with the dynamics of economic growth. In panel models constructed for countries of the "old" Union, regression coefficients for the old-age rate and the venerable senility rate were respectively: –0,446 and –1,521, while for the "new" EU countries were equal to: –0,153 (for the old-age rate) and –0,980 (for the venerable senility rate). This means that the negative impact of demographic aging on the GDP growth rate is more strongly observed in the countries of the "old" Union in comparison with the countries of the "new" Union.

scholarly journals The impact of tourism growth on income inequality: Evidence from developing and developed economies

2020 ◽  
pp. 135481662093490 ◽  
Author(s):  
Jianchun Fang ◽  
Giray Gozgor ◽  
Sudharshan Reddy Paramati ◽  
Wanshan Wu
Keyword(s):  
Income Inequality ◽  
Fixed Effects ◽  
Developing Economies ◽  
Negative Impact ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Annual Data ◽  
Developed Economies ◽  
Significant Negative Impact ◽  
The Impact

In this article, we investigate the effects of tourism indicators on income inequality (IIE) in a sample of 102 countries. We divide the sample countries into 71 developing and 31 advanced economies. Using annual data from 1995 to 2014, we employ panel unit root tests, cointegration, fixed-effects, fully modified ordinary least squares, and causality techniques. Our findings show that tourism indicators have a significant negative impact on IIE in developing economies, while they have an insignificant impact in developed economies. Conversely, economic globalization increases IIE in developing economies, whereas its effect is positive but statistically insignificant in developed countries. From these findings, the study outlines detailed policy and practical implications.

scholarly journals Trade Balance Effects on Economic Growth: Evidence from European Union Countries

Economies ◽  
2020 ◽  
Vol 8 (3) ◽  
pp. 54
Author(s):  
Deimante Blavasciunaite ◽  
Lina Garsviene ◽  
Kristina Matuzeviciute
Keyword(s):  
Economic Growth ◽  
European Union ◽  
Trade Balance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Trade Deficit ◽  
Multivariate Regression Analysis ◽  
The European Union ◽  
Linear Effect ◽  
The Impact

A growing number of recent research analyse the trade balance impact on economic growth. However, ambiguous results of studies imply the need for the research as the deteriorating trade balance hinders economic growth. This research aims to investigate the impact of the trade balance on economic growth as well as to evaluate it during the periods of trade deficit. Our estimations are based on the European Union (EU) 28 countries panel data over the period of 1998–2018, using the OLS method of multivariate regression analysis with fixed effects and focusing on two strategies: (i) including all trade balance periods, and (ii) adding deficit dummy variable seeking to evaluate whether during deficit periods we can find different and significant effect on economic growth. Evaluating all trade balance periods, the obtained results indicate the negative and lagging impact of the trade balance on economic growth, and no significant differences of the impact were identified during the deficit periods. The deterioration of trade balance reduces average economic growth and from linear relationship evaluation, we can state that it does not matter whether it starts from trade deficit or surplus result. The results obtained may also obscure the possibility of a non-linear effect, which would suggest a stronger negative impact on economic growth when the trade balance deteriorates in the presence of a large trade deficit. When discussing directions for further research it would make sense to consider other factors, such as the size of the deficit and its permanence.

scholarly journals The impact of credit risk and macroeconomic factors on profitability: the case of the ASEAN banks

2020 ◽  
Vol 15 (1) ◽  
pp. 21-29
Author(s):  
Myra V. De Leon
Keyword(s):  
Credit Risk ◽  
Fixed Effects ◽  
Inflation Rate ◽  
Ordinary Least Squares ◽  
Gdp Growth ◽  
Fixed Effects Model ◽  
Macroeconomic Factors ◽  
Factors Affecting ◽  
Level Of Significance ◽  
The Impact

This study investigates the effect of credit risk and macroeconomic factors on profitability of 20 ASEAN banks, particularly from Indonesia, Malaysia, Thailand and Philippines, covering the period of 2012 to 2017. The unbalanced panel data were tested for heteroscedasticity and normality. A fixed effects model and a random effects model were utilized followed by simple ordinary least squares (OLS) regression. The obtained results show that credit risk and GDP growth negatively affect Return on Equity (ROE) at 5% level of significance. The inflation rate increases ROE by 0.323%. In terms of influence, inflation has the highest impact on ROE followed by GDP growth and credit risk. Credit risk and GDP growth negatively affect Return on Assets (ROA) at 5% level of significance. ROA was also influenced by an increase in inflation rate. Therefore, this study will help banks and bank managers, depositors, investors, policy makers and governments to identify factors affecting bank profitability.

scholarly journals An empirical analysis on the impact of non-performing loans on investment and economic growth and the role of political governance

2020 ◽  
Vol 8 ◽  
pp. 1-21
Author(s):  
Swapnanil SenGupta ◽  
Keyword(s):  
Fixed Effects ◽  
Negative Impact ◽  
Annual Data ◽  
Fixed Effects Model ◽  
Model Composite ◽  
Paradoxical Result ◽  
Governance Index ◽  
Political Governance ◽  
The Impact

Objective: To empirically analyze the link between nonperforming loans and investments along with the role of political governance. The estimation technique used is the fixed effects model including both the country and timMethods: e fixed effects. The dataset consists a panel of 103 countries with annual data over the period from 2000 to 2017. A unique composite political governance index has been prepared combining the six existing governance indicators via Principal Component Analysis (PCA). Findings: It is found that NPL has significant negative impact whereas, governance has significant positive impact on investments as per expectations. However, it is found that the negative impact of NPL on investment gets stronger in presence of good governance. This is a paradoxical result and further attempts has been made to rationalize the outcome. Applications: The study empirically proves the theory of negative impacts of NPL on investment in the economy. Furthermore, the role of political governance has been scrutinized. No prior works have been carried out on this topic. The paradoxical result in this study has opened up new areas for research. An extensive literature review has been provided along with a detailed discussion on the possible measures to tackle with the problems. JEL Classification: C3, E6, G0. Keywords: NPL; investment; political governance institutions; fixed effects model; composite political governance index

scholarly journals Empirical Evidence Regarding the Impact of Economic Growth and Inflation on Economic Sentiment and Household Consumption

2021 ◽  
Vol 14 (7) ◽  
pp. 336
Author(s):  
Larissa Batrancea
Keyword(s):  
Economic Growth ◽  
Fixed Effects ◽  
Negative Impact ◽  
Positive Impact ◽  
Generalized Method Of Moments ◽  
Household Consumption ◽  
Global Market ◽  
Policy Implications ◽  
The European Union ◽  
The Impact

The dynamics of the interconnected global market and consumption behavior has recently changed considerably. Using a sample of 28 nations within the European Union, the study examined the degree to which economic growth and inflation impacted economic sentiment and household consumption during the time frame of December 2019 up to October 2020. The results estimated via panel generalized method of moments and panel least squares (with cross-section weights, time fixed effects) showed that economic sentiment and household consumption were significantly shaped by the proxies of economic growth and inflation. Moreover, in the case of economic sentiment, the negative impact of inflation was much stronger than the positive impact of economic growth. The reverse applied in the case of household consumption. The study draws policy implications regarding the strategies that public authorities, companies, and individual consumers could apply for stimulating national economies amid challenging times.

South Africa’s increasing climate variability and its effect on food production

2021 ◽  
pp. 003072702110049
Author(s):  
Mashudu Tshikovhi ◽  
Roscoe Bertrum van Wyk
Keyword(s):  
South Africa ◽  
Climate Variability ◽  
Food Production ◽  
Fixed Effects ◽  
Crop Yields ◽  
Negative Impact ◽  
Secondary Data ◽  
Mean Annual Temperature ◽  
Fixed Effects Panel Regression ◽  
The Impact

This study examines the impact of increasing climate variability on food production in South Africa, focusing on maize and wheat yields. A two-way fixed effects panel regression model was used to assess the climate variability impacts, analysing secondary data for the period 2000 to 2019 for nine provinces in South Africa. The study found that increasing climate variability has a negative impact on maize and wheat production in South Africa. Specifically, the results indicated a negative correlation between mean annual temperature with both maize and wheat yields. A decrease in precipitation affected maize yields negatively, while the impact on wheat yields was positive, although insignificant. This analysis, therefore, depicted that crop yields generally increase with more annual precipitation and decrease with higher temperatures. The study recommends that funding initiatives to educate farmers on increasing climate variability and its effects on farming activities in South Africa should be prioritised.

The Impact of Nontariff Trade Policy of European Union Crude Palm Oil Import on Indonesia, Malaysia, and the Rest of the World Economy: An Analysis in GTAP Framework

2020 ◽  
Vol 9 (1) ◽  
pp. 39-52
Author(s):  
Rozy A. Pratama ◽  
Tri Widodo
Keyword(s):  
European Union ◽  
Palm Oil ◽  
Computable General Equilibrium ◽  
Negative Impact ◽  
Trade Policies ◽  
The European Union ◽  
The World ◽  
Trade Analysis ◽  
Global Trade Analysis Project ◽  
The Impact

Indonesia and Malaysia are the largest producers and exporters of palm oil in the world vegetable oil market. Palm oil and its derivative products are the highest contributors to foreign exchange in 2018. This study aims to analyze the impact of the European Union import non-tariff trade policies on the Indonesian and Malaysian economies The analysis uses the Computable General Equilibrium (CGE) model of world trade on the Global Trade Analysis Project (GTAP) program. The results of this study found that the non-tariff import policy by the European Union had a negative impact on the economies of Indonesia and Malaysia. Moreover, the policy also has a negative impact on countries in Southeast Asia and the European Union. This shows that the enactment of non-tariff import trade policies for Indonesian and Malaysian palm oil products has a global impact.

Fiscal Deficit and Economic Growth in Bangladesh

2016 ◽  
Vol 62 (1) ◽  
pp. 31-42 ◽  
Author(s):  
Ebney Ayaj Rana ◽  
Abu N. M. Wahid
Keyword(s):  
Economic Growth ◽  
Budget Deficit ◽  
Negative Impact ◽  
Political Stability ◽  
Ordinary Least Squares ◽  
Policy Implications ◽  
Government Budget ◽  
The Government ◽  
The Impact ◽  
Government Budget Deficit

The economy of Bangladesh is currently going through a period of continuous budget deficit. The present data suggest that the government budget deficit, on average, is nearly 5% of the country’s GDP. This has been true since the early 2000s. To finance this deficit, governments have been borrowing largely from domestic and foreign sources resulting in inflationary pressure on one hand, and crowding out of private investments on the other. During the same period, although the economy has grown steadily at a rate of more than 6%, this growth is less than the potential. This article presents an econometric study of the impact of government budget deficits on the economic growth of Bangladesh. We conduct a time-series analysis using ordinary least squares estimation, vector error correction model, and granger causality test. The findings suggest that the government budget deficit has statistically significant negative impact on economic growth in Bangladesh. Policy implications of our findings include reestablishing the rule of law, political stability in the country, restructuring tax structure, closing tax loopholes, and harmonizing fiscal policy with monetary policy to attract additional domestic and foreign investment.

scholarly journals Analysis and Assessment of New Permanent Teacher Training Activities under the Erasmus+ Program from the Perspective of the Participants of Spain in Times of COVID-19

2021 ◽  
Vol 13 (20) ◽  
pp. 11222
Author(s):  
Daniel Salcedo-López ◽  
Mercedes Cuevas-López
Keyword(s):  
Teacher Training ◽  
Negative Impact ◽  
Positive Impact ◽  
Student Mobility ◽  
The European Union ◽  
International Mobility ◽  
Global Pandemic ◽  
Training Activities ◽  
The University ◽  
The Impact

The Erasmus+ program (2014–2020) is one of the main initiatives developed by the European Commission in the field of education and is the final joint evolution of other minor and prior actions that provide schools and teachers with funding to carry out international mobility projects with a variety of formative activities. The benefits of carrying out international mobility activities to strengthen student learning and teacher training are well known and have been researched or reported even from the early stages of a program that was born back in the 1980s but has always been focused on the university level. When considering teachers at early levels (schools and high schools), the 2014–2020 Erasmus+ program was the main source of funding to grant Spanish teachers permanent training activities abroad with a direct positive impact on their careers. The year 2020 is the last year of the first evolution of the Erasmus+ program, which has been renewed, extended, and strengthened for a new six-year term (2021–2027). However, 2020 has also been a significant year. The COVID-19 global pandemic continues to affect the mobility of citizens within the different territories of the union and, thus, have a direct negative impact on international teacher and student mobility. Being 2020 the end of a cycle and a critical moment, it is the perfect time to conduct an analysis of the data associated with the participation of teachers and schools in Spain, their perceptions of the program, the different activities carried out, and the impact of the pandemic. This research study is based on an analysis of an opinion survey through a nationwide sample of teachers participating in KA101 Erasmus+ projects. This paper gathers and presents data and conclusions using information previously not available that most of the time is published in official reports globally without considering the particularities of the different states of the European Union.

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