scholarly journals Determinants and convergence of income diversification in Ghanaian banks

2020 ◽  
Vol 2 (2) ◽  
pp. 34-47 ◽  
Author(s):  
King Carl Tornam Duho ◽  
Joseph Mensah Onumah ◽  
Emmanuel Tetteh Asare
Keyword(s):  
Credit Risk ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Future Research ◽  
Diversification Strategy ◽  
Income Diversification ◽  
Sigma Convergence ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
Beta Convergence

The study explores the determinants of income diversification, as well as, test for the existence of beta-convergence and sigma-convergence among Ghanaian banks. The study utilizes a dataset of 32 banks covering the periods 2000 to 2017. The panel corrected standard error ordinary least squares, fixed effects and system generalized methods of moments have been used. Both beta-convergence and sigma-convergence exist among Ghanaian banks; suggesting the presence of the catch-up effect and similarity of strategy over time. The risk profile and risk portfolio of banks affect their diversification strategy. Banks that are faced with high insolvency risk and liquidity risk tend to diversify while banks that are faced with low credit risk tend to diversify. Stable banks tend to adopt a diversification strategy even when they are exposed to credit risk. Network embeddedness drives diversification strategy. The implications of the study for practice, policy, and future research have been discussed.

Credit risk in Islamic banking: evidence from the GCC

2020 ◽  
Vol 11 (5) ◽  
pp. 1055-1081
Author(s):  
Trevor Chamberlain ◽  
Sutan Hidayat ◽  
Abdul Rahman Khokhar
Keyword(s):  
Credit Risk ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Islamic Banks ◽  
Gulf Region ◽  
Content Type ◽  
Multivariate Tests ◽  
Interaction Variables ◽  
Cost Inefficiency ◽  
Conventional Banks

Purpose This study aims to investigate the differences in the credit profiles of Islamic and conventional banks in the Gulf Cooperation Council (GCC) region and attempts to identify the factors responsible for those differences. Design/methodology/approach Financial data sourced from the Bankscope database for a sample of 25 Islamic and 56 conventional banks headquartered in the GCC region between 1987 and 2014 are used. The credit risk of Islamic versus conventional banks is compared using a variety of univariate (mean difference test and correlation analysis) and multivariate tests (pooled ordinary least squares (OLS) regressions with robust standard errors and year fixed effects, regressions with interaction variables and logistic regressions). Findings Pooled OLS regressions find that Islamic banks have lower credit risk than conventional banks. Robustness checks using logistic functions and interaction variables confirm this result. Using multiple econometric specifications, we also find that higher capitalization, greater liquidity and cost inefficiency contribute to the lower risk profile of Islamic banks. Research limitations/implications The study is unable to disaggregate data for banks offering both Islamic and conventional banking services and hence does not include conventional banks with Islamic windows. In addition, there are differences across countries even within the GCC region as to what is considered Sharia’h-compliant and what is not. Practical implications The results are of potential interest to not only researchers, but also market participants, regulators and legislators. The methods used in this study could be extended to other two-tiered banking systems and, in the case of Islamic and conventional banking, to other markets. Originality/value The authors use a unique sample of banks headquartered in the GCC countries, whose banking markets are similar, if not homogeneous, thus excluding operations of multinational banks. By focusing on the Gulf region, differences in the credit profiles of Islamic and conventional banks can be examined without the confounding effects of unobserved factors like culture, accounting regime or regulatory environment.

Does Corruption Facilitate Growth? A Cross-national Study in a Non-linear Framework

2017 ◽  
Vol 6 (2) ◽  
pp. 178-193
Author(s):  
Shrabani Saha ◽  
Girijasankar Mallik ◽  
Dimitrios Vortelinos
Keyword(s):  
Fixed Effects ◽  
Jel Classification ◽  
National Study ◽  
Alternative Measure ◽  
Linear Framework ◽  
Non Linear ◽  
Generalized Methods Of Moments ◽  
Panel Fixed Effects ◽  
Cross National Study ◽  
Methods Of Moments

The article examines the corruption–growth relationship in a non-linear framework using panel fixed effects (FE) and system generalized methods of moments (SGMM) model for over 110 countries for the period 1984–2009. The results reveal that the least corrupt countries enjoy higher growth rates, whereas highly corrupt countries experience low growth. Furthermore, corruption has a positive and significant effect on economic growth up to a certain level and thereafter it reduces growth. The results are robust under various methodology and an alternative measure of corruption. JEL Classification: D73, O47, O50

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 Drought and Property Prices: Empirical Evidence from Provinces of Iran

2020 ◽  
Author(s):  
Mohammad Reza Farzanegan ◽  
Mehdi Feizi ◽  
Hassan F. Gholipour
Keyword(s):  
Panel Data ◽  
Dynamic System ◽  
Fixed Effects ◽  
Time Trend ◽  
Land Prices ◽  
Property Prices ◽  
Generalized Methods Of Moments ◽  
The Difference ◽  
Methods Of Moments ◽  
Positive Effect

AbstractThis study examines the effect of drought on housing and residential land prices in Iran. Using panel data covering the 2006–2015 period for 31 provinces of Iran and applying a dynamic system and the difference Generalized Methods of Moments (GMM) methods, we find that an increase in the balance of water (reducing the severity of drought) within provinces has a positive effect on property prices. Our results are robust, controlling for province fixed effects, time trend, and a set of control variables that may affect property prices.

scholarly journals Beta and Sigma – Convergence of Productivity of NUTS 2 Regions in the (EU) Member States from the CEE Region

2020 ◽  
Keyword(s):  
Gross Domestic Product ◽  
Fixed Effects ◽  
Scientific Paper ◽  
Ordinary Least Squares ◽  
Domestic Product ◽  
Least Squares Regression ◽  
The European Union ◽  
Member States ◽  
Eu Member States ◽  
Sigma Convergence

In this scientific paper we have examined the presence of beta and sigma-convergence of productivity in the Central and East European NUTS 2 statistical regions of the European Union member states of Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia, Slovenia for the period from 2000 to 2016. Applying a fixed effects panel ordinary least squares regression on real Gross domestic product per employee and Gross domestic product per employee in PPS terms, we find that a catch-up process is underway, together with a decrease of dispersion in variables under investigation, respectively beta and sigma convergence hypotheses are supported for the NUTS 2 regions in selected countries under investigation.

scholarly journals The Effect of Liquidity Risk and Credit Risk on the Bank Performance: Empirical Evidence from Iraq

2021 ◽  
Vol 3 (1) ◽  
pp. 58-67
Author(s):  
Noor Hashim Mohammed Al-Husainy ◽  
Hamid Mohsin Jadah
Keyword(s):  
Credit Risk ◽  
Commercial Banks ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Bank Performance ◽  
Bank Profitability ◽  
Dynamic Panel Model ◽  
Credit Risks ◽  
Generalized Methods Of Moments

The main objective of this paper is to study the effect of liquidity risk and credit risk on the profitability of commercial banks in Iraq. The sample is 18 private commercial banks listed in Iraqi Stock Exchange for six years for the period 2010 to 2020. This paper especially focuses on Iraqi commercial private Banks. The dependent variable is bank performance is measured by return on asset (ROA) and independent variables are, liquidity risks, credit risks. This paper employs a dynamic panel model, using Generalized Methods of Moments (GMM) panel data regression of Fixed-effects models. Furthermore, the findings illustrate that liquidity risk has a positive significant association with bank profitability. Meanwhile, credit risk has an adverse significant association with bank profitability. This paper contributes to the debate of risk management as well as determinants of bank performance from several dimensions. First, this study is the first to investigate the impacts of liquidity risks on bank performance in Iraq. Secondly, this is the first study that investigates the impacts of credit risks on bank performance in Iraq. It is hoped that the result of this paper can fill the gap of the literature on the association between liquidity risks, credit risks, and bank performance.

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 antecedents of corporate social and environmental responsibility discourse in Pakistan: Multiple theoretical perspectives

2019 ◽  
Author(s):  
Muhammad Farhan Basheer ◽  
Saqib Muneer ◽  
Muhammad Atif ◽  
Zubair Ahmad
Keyword(s):  
Institutional Theory ◽  
Least Squares ◽  
Agency Theory ◽  
Stakeholder Theory ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Environmental Responsibility ◽  
Legitimacy Theory ◽  
Discourse Practices ◽  
Corporate Social

The primary purpose of the study is to explore the antecedents of corporate social and environmental responsibilities discourse practices in Pakistan. The industry sensitivity, government shareholding, block holder ownership, print media coverage, environmental monitoring programs, and strategic posture are examined as antecedents of corporate social and environmental responsibility practices. A multidimensional theoretical perspective namely stakeholder theory (ST), institutional theory (IT), agency theory (PAT), and legitimacy theory (LT) is used to conceptualize the phenomena. All the four of perspective theories (positive accounting theory, legitimacy theory, stakeholder theory, and institutional theory) claim that there are ‘pressures’ that impact the organization. How much ‘pressures’ are recognized, managed or satisfied differs from one perspective of theory to the other. To estimate the data, this study uses three sets of panel data models, i.e., the pooled ordinary least squares model (POLS) or constant coefficients model, fixed effects (FEM or least squares dummy variable/LSDV model) and random-effects models. The final sample is comprising of 173 firms over eight years from 2011 to 2017. The firms listed in PSX are included in the sample. Overall the findings of the study have shown agreement with the proposed results. However, the study has provided more support to the institutional theory and stakeholder theory. Keywords: Corporate Social Responsibility, Stakeholders Theory, Agency Theory, Pakistan

scholarly journals Analysis of the New Kuznets Relationship: Considering Emissions of Carbon, Methanol, and Nitrous Oxide Greenhouse Gases—Evidence from EU Countries

2021 ◽  
Vol 18 (6) ◽  
pp. 2907
Author(s):  
Mara Madaleno ◽  
Victor Moutinho
Keyword(s):  
Nitrous Oxide ◽  
Least Squares ◽  
Fixed Effects ◽  
Ghg Emissions ◽  
Ordinary Least Squares ◽  
Kuznets Curve ◽  
Ekc Hypothesis ◽  
Long Run ◽  
Short Run ◽  
The Eu

Decreased greenhouse gas emissions (GHG) are urgently needed in view of global health threat represented by climate change. The goal of this paper is to test the validity of the Environmental Kuznets Curve (EKC) hypothesis, considering less common measures of environmental burden. For that, four different estimations are done, one considering total GHG emissions, and three more taking into account, individually, the three main GHG gases—carbon dioxide (CO2), nitrous oxide (N2O), and methane gas (CH4)—considering the oldest and most recent economies adhering to the EU27 (the EU 15 (Old Europe) and the EU 12 (New Europe)) separately. Using panel dynamic fixed effects (DFE), dynamic ordinary least squares (DOLS), and fully modified ordinary least squares (FMOLS) techniques, we validate the existence of a U-shaped relationship for all emission proxies considered, and groups of countries in the short-run. Some evidence of this effect also exists in the long-run. However, we were only able to validate the EKC hypothesis for the short-run in EU 12 under DOLS and the short and long-run using FMOLS. Confirmed is the fact that results are sensitive to models and measures adopted. Externalization of problems globally takes a longer period for national policies to correct, turning global measures harder and local environmental proxies more suitable to deeply explore the EKC hypothesis.

scholarly journals Forest Quality Dynamic Change and Its Driving Factors Accompanied by Forest Transition in China

Forests ◽  
2021 ◽  
Vol 12 (6) ◽  
pp. 733
Author(s):  
Li Gu ◽  
Zhiwen Gong ◽  
Yuankun Bu
Keyword(s):  
Fixed Effects ◽  
Temporal Dynamics ◽  
Spatial Clustering ◽  
Dynamic Change ◽  
Forest Area ◽  
Future Research ◽  
Suitable Model ◽  
Forest Transition ◽  
Significance Level ◽  
Province Level

As ecological and environmental issues have received continuous attention, forest transition has gradually become the frontier and a hot issue, which have implications for biodiversity and ecosystem functioning. In this study, the spatial-temporal dynamics and the spatial determinants of forest quality were investigated using spatial econometric regression models at the province level, which contained 31 provinces, autonomous regions, and municipalities in China. The results showed that forest area, forest volume, forest coverage, and forest quality have greatly increased as of 2018, but uneven forest distribution is an important feature of forest adaptation to the environment. The global Moran’s I value was greater than 0.3, and forest quality of the province level had a positive spatial correlation and exhibited obvious spatial clustering characteristics. In particular, the spatial expansion of forest quality had shown an accelerated concentration. The most suitable model for empirical analysis and interpretation was the Spatial Durbin Model (SDM) with fixed effects. The average annual precipitation and the area ratio of the collective forest were positively correlated with forested quality (significance level 1%). Ultimately, this framework could guide future research, describe actual and potential changes in forest quality associated with forest transitions, and promote management plans that incorporate forest area changes.

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